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426

DEPARTMENT OF THE INTERIOR

AUGUST 9, 1934

the instant case, we are not dealing with an investment of restricted moneys in taxable lands, but with the restoration to the Indians of a preexisting title taken from them under circumstances indicating constructive fraud. Had the title been restored by a court decree setting aside the conveyances from the Indians, the title would unquestionably have been received by them subject to the original restrictions protecting the land from both alienation and taxation. That restoration of the title resulted from the voluntary action of the parties in effecting the compromise should not call for a different result. In Drummond v. United States (34 Fed. 2d 755) it was held that Indians who, after the sale of their restricted lands, subject to mortgage, received a deed from the defaulting purchasers in settlement, held the title subject to the original Federal restrictions. The court said:

    "It is contended here, of course, that the deed to Brown and Boren was intended to convey to them an unrestricted title, but the condition was that it was to be unrestricted in their hands only, and that if it reverted by foreclosure or otherwise, it was then to be held by the Indians as originally. To hold that the failure of the Secretary of the Interior to promulgate a regulation covering the contingency of a surrender without foreclosure should result in a removal of restrictions in such a case, would be to defeat the obvious intent and purpose of the government to afford the Indians the protection intended for them. Looking at substance, and not form, we think that it is clear that the transaction with Brown and Boren was nothing more than an abortive sale of a restricted allotment."
    To the same effect is Smith v. McCullough (270 U.S. 456). In that case a restricted Quapaw Indian, with the approval of the Secretary of the Interior, had conveyed his restricted land by deed which described itself as a mortgage and subsequently received a release and reconveyance. The court held that the transaction did not rid him of the restrictions on the land, and that when the reconveyance was made the situation was essentially the same as if there had been no conveyance. While the facts in these cases are not the same as those involved in the case under consideration, the principle announced appears to be applicable.

    Conceding that the matter is not entirely free from doubt, I am constrained, in view of the foregoing, to hold that the two-thirds royalty interest of Manna, Lillie and Eddie Lewis in the allotted lands of John Lewis, deceased, was not taxable during the period covered by the claim of the Oklahoma Tax Commission and, therefore, recommend that payment of the claim be denied.

                                                                                                                                            NATHAN R. MARGOLD,

Solicitor.

WHEELER-HOWARD ACT--FEE PATENT

August 14, 1934.
Memorandum for Mr. Collier:

    I do not see any room for doubt or argument on the question whether the Wheeler-Howard Act forbids the granting of fee patents. Early drafts of the bill prepared in this Office specifically prohibited the granting of fee patents in the following terms:

    "The authority of the Secretary of the Interior to issue to Indians patents in fee or certificates of competency or otherwise to remove the restrictions on land allotted to individual Indians under any law or treaty is hereby revoked."
This specific prohibition was deliberately struck out at a hearing of the Subcommittee of the Senate Committee on Indian Affairs appointed to study the Wheeler-Howard Bill. It was struck out at the suggestion of Senator Wheeler, who declared, in substance, that it would be monstrous to deprive the Secretary of the Interior of discretion to release Indians of the standing of Mr. Curtis from restrictions on alienation. At this time, you consented to Senator Wheeler's suggestion. I can see no reason for questioning now the effect of this deliberate omission. The memorandum of Mr. Reeves offers no argument for any other construction than the one thus confirmed by the history of the legislation.

    I agree with your suggestion that, under the circumstances, the sweeping attempt in Section 4 to prohibit alienations of restricted Indian land is largely meaningless, and that the original purpose of the statute in this, as in several other respects, has not been achieved. The remedy for this, in my judgment, is amendatory legislation, rather than arbitrary interpretation of the legislation already secured which may be overthrown by a contrary construction on the part of a future Administration.

                                                                                                                                            NATHAN R. MARGOLD,

Solicitor.

 
 

 

427

OPINIONS OF THE SOLICITOR

AUGUST 17, 1934

DEVISE OF RESTRICTED LANDS

54 I.D. 584

M-27776                                                                                                                                            August 17, 1934.

SYNOPSIS

    Section 4 of the Wheeler-Howard Act (Public No. 383, 73d Congress), construed in the light of its legislative history, extends the privilege of receiving a devise of restricted Indian lands to the lawful heirs of the testator, whether or not members of any Indian tribe.

The Honorable,
The Secretary of the Interior.

MY DEAR MR. SECRETARY:

    My opinion has been requested upon the proper construction of section 4 of the Wheeler-Howard Act (Public No. 383, 73d Congress) in so far as this section limits the class of persons to whom an Indian may devise restricted lands.

    The relevant language of this section declares:

    "Except as herein provided, no sale, devise, gift, exchange or other transfer of restricted Indian lands or of shares in the assets of any Indian tribe, or corporation organized hereunder, shall be made or approved: Provided, however, That such lands or interests may, with the approval of the Secretary of the Interior, be sold, devised, or otherwise transferred to the Indian tribe in which the lands or shares are located or from which the shares were derived or to a successor corporation; and all instances such lands or interests shall descend or be devised, in accordance with the then existing laws of the State, or Federal laws where applicable, in which said lands are located or in which the subject matter of the corporation is located, to any member of such tribe or of such corporation or any heirs of such member:"
    The question of what persons other than members of the testator's tribe may lawfully be designated as devisees of his restricted property, where such property is subject to the terms of the Wheeler-Howard Act, is raised by the ambiguity of the last two words in the passage above quoted, namely, "such member". If "such member" refers to the testator himself, then the class of nonmembers entitled to receive restricted Indian property Will be limited to those who through marriage, descent or adoption have acquired a relationship to the testator sufficient to constitute them heirs at law.

    If the words "such member" be constructed to mean any member to whom the property in question might be devised, then, apparently, nonmember heirs of other Indians than the testator might be made devisees of the testator's restricted property.

    In the third place, the phrase "such member" might be construed to refer to a member who is a devisee under the will in question.

    While a strictly grammatical construction might lead to the conclusion that "such member" referred to the preceding phrase "any member of such tribe or of such corporation" and thus would seem to justify either the second or the third interpretation of the phrase in question suggested above, I am of the opinion that such a construction cannot be reasonably maintained and that the first interpretation advanced above is the proper one, i.e. that the testator may devise to his own heirs regardless of their membership or nonmembership in any Indian tribe or corporation, but that outside the circle of heirs, the testator may devise only to fellow-members of his tribe or corporation.

    The third construction advanced above, namely, that under the section in question the class of proper devisees includes, in addition to all members of the testator's tribe or corporation, all nonmembers who happen to be heirs of those members benefiting from the will, seems to reduce to meaninglessness. If A devises property to B, B has no heirs if he is alive, and on the other hand, if B is dead at the time the will takes effect B's heirs take by substitution and an express devise to them is, therefore, unnecessary. In either case a statutory grant of power to devise property not only to B but to B's heirs would be without meaning.

    A similar difficulty arises if we attempt to construe the phrase "such member" as referring to all those members of the Indian tribe who might be devisees themselves, i.e. all members of the tribe except the testator. The living members of the tribe have no heirs. The only possible beneficiaries of this construction would be, therefore, the non-member heirs of those members of the tribe who have died prior to the execution of the will. While this is a legally possible construction, it is not one which commends itself to reflective judgment. Congress certainly did not intend to give the privilege of receiving a devise of restricted land to all non-Indians who might be the heirs of any of the deceased members of the Indian tribe to which the testator belonged, and to exclude from this privilege the heirs of the testator himself. Certainly Congress was not considering the condition of non-Indians having no subsisting relationship with the
 


 

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DEPARTMENT OF THE INTERIOR

AUGUST 17, 1934

decedent or with any living member of his tribe but who might nevertheless show some right of inheritance from an Indian member of the tribe long deceased.

    The circumstances under which the phrase "or any heirs of such member" was inserted in the Wheeler-Howard Bill indicate the proper meaning to be attached to that phrase. Early drafts of the legislation (e.g. H. R. 7902, Title III, Sec. 5, April House Committee Print; S. 2755, Sec. 4, May Senate Committee Print), both in the House and in the Senate, limited the privilege of inheriting restricted property to the members of the testator's tribe, in accordance with the fundamental purpose of the legislation to conserve Indian lands in Indian ownership and to prevent the further checker-boarding of Indian lands through the acquisition of parcels of such lands by persons not subject to the authority of the Indian tribe or reservation. To this limitation the objection was urged that in some cases the heirs of a deceased Indian would not be members of the tribe or corporation to which the deceased had adhered, and that it would be unfair to deny such natural heirs the right to participate in a devise of property. The House Committee on Indian Affairs, therefore, added to the clause first considered the phrase "or any heirs of such member". (H. R. 7902, Sec. 4, as reported to the House). Independently, the Senate Committee on Indian Affairs added to the draft under its consideration a parallel phrase more restricted in scope, "or the Indian heirs of such member". (S. 2755, Sec. 4, Committee Print No. 2; S. 3645, Sec. 4, as reported to the Senate). It seems clear that the purpose of these legislative afterthoughts was not to alter fundamentally the intent and scope of the original restriction but rather to provide for the exigencies of a special case that had not been distinctly considered, namely, the case of an Indian testator desiring to divide his estate by will among those who would, in the absence of a will, have been entitled to share in the estate, namely, his own heirs.

    That the Chairman of the House Committee on Indian Affairs so construed the phrase here in question is indicated by his explanatory statement to the House of Representatives:

    "Section 4 stops a dangerous leak through which the restricted allotted lands still in Indian ownership pass therefrom. Upon the death of an allottee the number of heirs frequently makes partition of the land impractical, and it must be sold at partition sale, when it generally passes into the hands of whites. This section endeavors to restrict such sales to Indian buyers or to Indian tribes or organizations. It. however, permits the devise of restricted lands to the heirs, whether Indian or not." (Cong. Rec. June 15, p. 12051).
    It requires no strained construction of language to interpret the phrase "or any heirs of such member" in accordance with this intent and purpose. The phraseology of section 4 suffers from the looseness of syntax incident to the agglutinative process of amendment. Grammatical rules, such as that requiring a definite antecedent for the word "such", are not always religiously observed in the closing days of a Congressional session. In the phrase "heirs of such member" the reference of the word "such" is supplied not by any clear grammatical antecedent but by the fact that the "member chiefly considered throughout the section, though never expressly named, is the testator. This is not the only instance in the statute where the word "such" cannot be construed by simple application of the rules of grammar. (See the initial words of Sec. 17).

    To conclude, legal usage requires that the phrase "heirs of such member" must refer to the heirs of one who is deceased. Nemo est haeres viventis. The only deceased person considered in the section is the testator. Evidence of the intent of Congress indicates that it is the testator's heirs that are being considered. I am of the opinion that the phrase "heirs of such member" should properly be construed to mean "heirs of the testator".

                                                                                                                                            NATHAN R. MARGOLD,

Solicitor.
Approved: August 17, 1934.
OSCAR L. CHAPMAN, Assistant Secretary.

QUAPAW--MINERAL LEASE

August 21, 1934.

 Memorandum to the Secretary:

    May 18, 1934, the Attorney General advised you that cases No. 8908 and 8920, United States v. Eagle-Picher Lead Company, instituted in the district court of the United States for the Western Division of the Western District of Missouri, had been dismissed. The suits were brought for the
 


 

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AUGUST 21, 1934

purpose of recovering from the defendant large sums of money alleged to be due on ores or other substances mined and removed from restricted lands allotted to Harry Crawfish and Mary Whitebird (now deceased) under lead and zinc leases operated by the defendant company. In 1912 both of these Indians acting under authority of the act of June 7, 1897 (30 Stat. 62, 72), executed leases on commercial form without the approval of the Department to certain persons, who subleased to the Eagle-Picher Company. These leases were for a period of ten years and at a royalty of five per cent. In 1922 new leases on departmental form were made and approved by the Secretary of the Interior to the Eagle-Picher Company under authority of the act of March 3, 1921 (41 Stat. 1225), which act extended the restrictions against alienation on Quapaw allotted lands and committed supervision and control of all mineral leases on the lands to the Secretary of the Interior. The new leases provided for a royalty of ten per cent and were made for a period of ten years and as long thereafter as lead and zinc minerals were found in paying quantities. The new leases are still in force.

    August 28, 1933, the Department approved two contracts, one executed by Harry Crawfish and the other by Helene Whitebird, now Romick, as an heir of Mary Whitebird, deceased, both restricted Quapaw Indians, employing one Marton H. Cooper, an auditor of Joplin, Missouri, in the matter of recovering for them additional sums on lead and zinc ores and other minerals alleged to have been removed but not paid for from the Harry Crawfish and Mary Whitebird allotments. The services of Mr. Cooper were to be confined to required auditing and accounting work, but the contract authorized him to employ attorneys at his expense, subject to the approval of the Department. Mr. Cooper selected as attorneys the law firm of Mosman, Rogers and Buzard, which selection the Department approved. Pursuant to his employment, Mr. Cooper presented to the Department detailed audits of the operations of the Eagle-Picher Company on the two allotments. It was shown by these audits that the ores mined and removed from the premises were valuable not only for the lead and zinc concentrates, but also for their sulphur content, which the Eagle-Picher Companycommercialized and sold. In the case of the Harry Crawfish allotment, the value of the sulphur content for which no accounting or payment was made to the Indian lessor was, according to the audit, about $233,000. The report on the Mary Whitebird allotment discloses that the value of the sulphur content was in the neighborhood of $358,000. In addition, the audit relating to the Whitebird land shows a shortage in royalty payments on lead and zinc concentrates of about $18,000.

    The Cooper audits were duly transmitted to the Department of Justice for investigation with the result that the suits under consideration were instituted. An examination of the petitions filed discloses that in addition to the claims based upon shortage in royalty payments on lead and zinc concentrates and the utilization of the sulphur content in the ores, the further claim was asserted that the commercial leases executed in 1912 were void and that the Indians were entitled to recover the full value of all minerals and other substances removed, less only the royalty of five per cent paid under the terms of the leases. On this count alone, the recovery sought in the Whitebird case exceeds $800,000.

    After the suits were brought the defendant company sought and obtained the hearing before the Department of Justice. Briefs were filed by the defendant and the attorneys for the Indians; and upon investigation and consideration thereof the Department of Justice concluded not only to dismiss the suit but to abandon the prosecution of any suit against the Eagle-Picher Company based upon the alleged invalidity of the commercial leases executed in 1912 or to recover any part of the proceeds derived from the utilization of the sulphur content contained in the lead and zinc ores mined and removed from the lands.

    With respect to the claim that lead and zinc ores have been removed and not paid for, it appears that the Attorney General had caused an investigation to be made with a view to effecting collection amicably or by court action of such amounts as may be found to be due the Indians.

    Following dismissal of the suit, the attorneys for the Indians requested that they be permitted to re-file and prosecute the suits independent of the Government in the name of the Indians. In view of that request and the large amounts involved, the Assistant Commissioner of Indian Affairs had in formally requested that I consider the matter with a view to determining, first, whether there is any legal basis for the claim against the Eagle-Picher Company based upon the alleged invalidity of the commercial leases of 1912 and also that based upon the action of the company in utilizing the sulphur content in the lead and zinc ores, and second, if so, whether the necessary suits should be instituted and prosecuted by the United States or by the Indians themselves through the private counsel employed as aforesaid.
 


 

430

DEPARTMENT OF THE INTERIOR

AUGUST 21, 1934

THE VALIDITY OF THE 1912 COMMERCIAL LEASES

    In 1912 leases were made by the Indians without departmental approval under authority of the act of June 7, 1897 (30 Stat. 62, 72), which reads:

    "That the allottees of land within the limits of the Quapaw Agency, Indian Territory, are hereby authorized to lease their lands, or any part thereof, for a term not exceeding three years, for farming or grazing purposes, or ten years for mining or business purposes. And said allottees and their leases and tenants shall have the right to employ such assistants, laborers, and help from time to time as they may deem necessary: Provided, That whenever it shall be made to appear to the Secretary of the Interior that, by reason of age or disability, any such allottee can not improve or manage his allotment properly and with benefit to himself, the same may be leased, in the discretion of the Secretary, upon such terms and conditions as shall be prescribed by him. All acts and parts of acts inconsistent with this are hereby repealed."
    The foregoing statute empowered Quapaw Indian allottees to lease their restricted lands for mining and other purposes without governmental supervision unless it was made to appear to the Secretary of the Interior that they were disqualified for the reasons stated in the statute, in which event the leases were required to be made under the supervision of the Secretary and subject, of course, to his approval. In the dismissed suits the validity of the leases made by Mary Whitebird and Harry Crawfish was attacked, not on the ground that the allottees were disqualified from leasing without governmental supervision, but on the ground that the act of June 7, 1897, had been superseded or repealed by certain subsequent laws. I agree with the position taken by the Department of Justice that as such subsequent laws are general statutes making no specific mention of the Quapaw Indians, they would not operate to take away powers specifically conferred on those Indians by a prior special statute. But in the case of the Mary Whitebird lease, other and far more substantial grounds exist for questioning the validity of the lease.

    The act of 1897 permits only those Quapaw Indians not under disability to lease without governmental supervision. Where made to appear to the Secretary that the Indians were disqualified in leasing without supervision for the reason stated in the act, leases by such Indians were invalid unless approved by the Secretary. Hampton v. Ewert (22 Fed. (2d) 81). January 24, 1907, the Secretary of the Interior prescribed regulations governing the making of mineral leases by allottees disqualified by age or disability from leasing without Federal supervision. Section 11 of the regulations contained a list of those allottees to whom the regulations applied and section 2 required that leases by them must be made on the form prescribed by the regulations and that all such leases must be submitted to the Superintendent or officer in charge of the Quapaw Agency within thirty days from their execution for transmission to the Secretary of the Interior. Amendments to these regulations were subsequently attempted but the Circuit Court of Appeals in Hampton v. Ewert, supra, held such attempts ineffective and that the regulations of January 24, 1907, remained in full force and effect. The court said:

    "It is conceded in the briefs that the regulations aforesaid recognized the necessity of such departmental supervision. It is obvious, upon the record, that those regulations were never formally rescinded, and that the letters indicating such a purpose were written merely in an effort to adjust irregularities that had crept in, as reported by the Quapaw Agency, if possible, without resort to drastic remedies, and without running counter to the wishes of the Indians, if that could be avoided. Upon ascertaining that the suggestions of the department in this regard met with strong disfavor and opposition, the Indian agents were instructed to proceed no further in that regard, and therefore, in our judgment, the regulations of January 24, 1907, remained in full force and effect."
    Section 11 of the regulations of January 24, 1907, constituted a finding by the Secretary of the Interior that the Indians therein named were in competent and disqualified from leasing without supervision under the act of 1897. The name of Mary Whitebird appears in section 11 of the regulations; hence the leases subsequently made by her in 1912 required the approval of the Secretary of the Interior to be valid. No such approval having been given, the lease was void. Moreover, the lease provided for an inadequate royalty of five per cent. The lease involved in Hampton v. Ewert, supra, provided for a like royalty, and the court, with respect thereto, said:
    "This lease reserved a royalty of but 5 per

 

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AUGUST 21, 1934

cent. It is evident that the Secretary of the Interior did not consider this a fair return, and we concur in that view. The minor Indians were, in our judgment, overreached and imposed upon in the lease conveyance made."

    A suit against the Eagle-Picher Lead Company on the ground that the Mary Whitebird lease was void thus appears to be fully justified on both legal and equitable grounds. As to the recovery to which the Indian heirs of Mary Whitebird are entitled, the rule invoked in Hampton v. Ewert, supra, applies:
    "One who, with knowledge of the incompetency of an Indian for whom the United States holds his land in trust, without the power in him to alienate it, induces him to sell the land to himself and apply for and obtain a patent in fee simple for it, and then to convey it to him, wrongfully appropriates the land to himself, becomes a trustees de son tort thereof and of its proceeds for the benefit of the Indian, and the United States may maintain a suit in equity to set aside, as against him, the patent and the deed, and, in case the title has passed to an innocent subsequent purchaser, to recover of the appropriator the amount he realized from the land above the amount he paid for it to the Indian."
    In expressing the foregoing view I am mindful of the decisions in Whitebird v. Eagle-Picher Lead Company (28 Fed. (2d), affirmed 40 Fed. (2d) 479, involving the validity of leases on the Mary Whitebird allotment. It does not appear, however, that the question herein raised was considered or passed upon by the court in that case. Even if it was, the Government, not being a party to that litigation, would not be bound and will not be precluded from maintaining a further suit upon the same issues.

    The validity of the commercial lease in 1912 on the Harry Crawfish allotment cannot, in my opinion, be successfully attacked. His name does not appear on the list of incompetents set forth in section 11 of the regulations of January 24, 1907; hence there is no basis for holding that he was disqualified from leasing without governmental supervision under the act of 1897. Moreover, on December 21, 1931, the Department approved a stipulation executed by and between Harry Crawfish and the Eagle-Picher Lead Company providing for the settlement of a suit which had been instituted on behalf of Harry Crawfish, involving the validity of both the economical and departmental leases on his lands. By paragraph 1 of this stipulation Harry Crawfish, in consideration of the payment of $2,400, acknowledged

"full settlement and satisfaction and full payment of all claims and demands of every kind and description which he now has or may hereafter claim to have by reason of occupation, mining, production, and/or sale of ore, prior to August 18, 1928, by the defendant, the Eagle-Picher Lead Company, or any of its tenants, lessees, or licensees from or upon"
the allotted lands of Harry Crawfish. The effect of this stipulation and its approval by the Secretary of the Interior necessarily is to confirm the commercial lease of 1912 and bar the further assertion of any claim based upon the alleged illegality of that lease.

THE SULPHUR CONTENT CLAIM

    The liability of the Eagle-Picher Company to the lessor for the proceeds derived from the utilization of the sulphur content contained in the lead and zinc ores will be first discussed under the commercial leases of 1912 on the Harry Crawfish and Mary Whitebird allotments. Both of these leases were given "for the purpose of prospecting and mining for lead, zinc, and all and any other kind or kinds of valuable mineral or ore, or fossil or vegetable substances whatever", and both provide for a royalty to the lessors of

"a sum of money equal to five per centum of the market value at the place mined or produced of all lead, zinc, and all other minerals or substances whatever which may be mined or removed by the said party of the second part, his executors, administrators, assigns or sublessees, from said lands herein leased."
    Under this all-inclusive language there can be no question but what the losses specifically covered the sulphur content in the lead and zinc ores and imposed upon the original lessee the obligation to make payment thereon of a five per cent royalty. But in the case of Harry Crawfish, the compromise settlement hereinbefore referred to, as approved by the Secretary of the Interior, appears to bar the assertion of such a claim and relieves the Eagle-Picher Company of any and all liability therefor. There is no such bar, however, in the Mary Whitebird case. True, the Eagle-Picher Company operated under a so-called sublease, and the general rule is that as there is no privity of contract or estate between the original lessor and the sublessee, the latter would not be liable to the former
 


 

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DEPARTMENT OF THE INTERIOR

AUGUST 21, 1934

for rents and royalties required to be paid by the original lease. See Thornton-Willis on Oil and Gas, volume 2, section 351, and cases there cited. But this rule appears to be without application here. Not only is the original lease made binding by its express terms upon sublessees, but the Circuit Court of Appeals, 8th Circuit, in Eagle-Picher Lead Company v. Fullerton (28 Fed. (2d) 472), after discussing in detail the negotiations and contract relations existing between the Eagle-Picher Company and S. C. Fullerton, an intermediate sublessee, and George W. Beck, Jr., the original lessee, on this and other leases, held that the various contracts between the parties created a joint adventure rather than a landlord and tenant relation. As a party to such a joint adventure, the Eagle-Picher Company would appear to be liable equally with the other interested parties to the landowner for the royalties specified in the lease. As the entire value of the sulphur would be included in the claim against the company based upon the invalidity of the 1912 lease, the royalty claim would be important, of course, only in the event of a ruling by the court that the 1912 lease is valid.

    Regarding the liability of the Eagle-Picher Company under the departmental leases of 1922, a more difficult question is presented. The leases in express terms are made for "lead and zinc mining purposes" and require the payment to the lessors as royalty "ten per cent upon all ores mined and sold from said land." The leases further provide that "the sale price basis for determination of the rates and amount of royalty * * * shall not be less than the highest and best obtainable market price of the lead and zinc ores' and concentrates, at the usual and customary place of disposing of such ores and concentrates at the time of sale." It is to be observed that these leases are limited to the mining of land and zinc only and that the royalties provided for are to be based upon the lead and zinc ores or concentrates. No mention is made in the leases of sulphur or other minerals, and no provision is made for the payment of royalties thereon. I am informed that the price of the lead and zinc ores if fixed each week or at stated times by the ore buyers getting together and designating the price per ton. The metal market is taken into consideration, and the metallic content of the ores is determined by assays. The lead and zinc content, as determined by the assays, are the only elements paid for, the sulphur content having no influence in fixing the base price for the lead and zinc.

    We are thus confronted with a situation in which the lessee has taken, utilized and sold a product not specifically covered by the lease and for which there has been no accounting and upon which no payment whatever has been made to the lessor. While I find no specific case dealing with this identical situation, there are many decided cases having a close analogy. Among these are cases involving the question of the liability of the lessee for taking and utilizing for the manufacture of gasoline a product known as casing-head gas under leases making no mention of either casing-head gas or gasoline. The question raised was whether such product was covered by the lease at all, and if covered, whether it was a component part of the oil and subject to the prescribed royalty on oil. One line of cases holds that the casing-head gas in neither oil nor gas within the meaning of those terms in the leases, and under these rulings the lessor appears to be entitled to an accounting for the value of the product whether utilized by the lessee or sold to another for that purpose. See Hammett v. Gypsy Oil Company (95 Okla. 234; 218 Pac. 501); Smith v. Pulaski Oil Company (233 Pac. 1051); George v. Curtain (236 Pac. 876); Ludey v. Pure Oil Company (11 Pac. (2d) 102). The principle underlying these cases is well stated in George v. Curtain, supra, as follows:

    "It will be observed that the parties contracted specifically regarding oil wells and gas wells, and the contract is silent as to the disposition of gas produced from an oil well, and therefore a different rule obtains to the rule laid down by this court in the case of Musselem v. Magnolia Petroleum Co., (107 Okla. 183, 231 P. 526), and followed by this court in the case of Paulter et al., v. Franchot et al., 235 P. 209, decided January 27, 1925 (not yet officially reported). In. those cases the lease contracts specifically fixed the right of the parties where gas was used from an oil well, but where the lease contract in the case at bar was made prior to the time when casing-head gasoline was known to be of commercial value, and no mention made of the casing-head gas to be taken from the oil wells, we are forced to the conclusion that that subject was not within the contemplation of the parties when the lease contract was entered into, and is therefore not covered or controlled by said leasecontract. Smith v. Pulaski, (88 Okl. 47, 211 P. 1047); Mullendore v. Minnehoma Oil Co., 233 P. 1051, decided by this court November 12, 1924. Therefore, since the plaintiffs in error bought and used the casing-head gas from the lessee who, under the terms of their lease contract, had no right to

 

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use or sell it, plaintiffs in error should be required to account to and pay the defendants in error therefor. The judgment of the trial court is therefore affirmed."

    Another line of cases likewise hold that the lessor is entitled to compensation for the casing-head gas utilized by the lessee under a lease in which that product is not specifically mentioned, but differ as to the measure of compensation. Thus in West Virginia, Louisiana and Texas, the courts take the position that casing-head gas is a component part of the oil upon which, when saved, the lessor is entitled to the royalty prescribed in the lease. See Locke v. Russell, (75 W. Va. 602; 84 S. E. 948); Wemple v. Producers Oil Company (145 La. 1031; 83 So. 232); Twin Hills Gasoline Company v. Bradford Oil Corporation (264 Fed. 440); Gilbreath v. States Oil Corporation (5 C.C.A. Tex.; 4 Fed. (2d) 232); Livingston Oil Corporation v. Waggoner (Tex. Civ. App.; 273 S. W. 903).

    In Locke v. Russell, supra, where it appeared that a lessee under an oil and gas lease was producing gasoline from casing-head gas, the court said:

    "No rule of law cited or found denies to defendants the right to utilize by any appropriate process, any useless waste from productions contemplated, so long as the lands are operated under the lease to the mutual advantage and profit of the parties: provided, however, the operator pays or tenders to the landowner his proper share or proportion of the returns from such utilization."
And in Gilbreath v. United Oil Corporation, supra, the court said:
    "Our conclusion is that the casing-head gas or gasoline must be considered as part of the oil since it partakes of the nature of that substance rather than what is ordinarily known as natural gas. It makes no difference that it is brought up in the form of vapor, or is extracted by artificial means. It forms the most important element of petroleum oil, and, as such, the lessee should be required to pay therefor, otherwise, he would be receiving a very valuable product without giving anything in return therefor."
    Similar principles have been invoked by the courts in determining the respective rights of the lessor and lessee under leases covering minerals other than oil and gas. Thus, in Kier v. Peterson (41 Pa. St. 357, 1861), land had been leased for the purpose, and with the privilege, of boring salt wells and manufacturing salt under certain provisions for forfeiture, and for a rent of every twelfth barrel of salt manufactured. It was held that, while the lessor could not maintain trover for petroleum which came to the surface with the salt water, he was nevertheless entitled to compensation therefor. Woodward, J., concurred in the decision but not in the reason. In his dissenting opinion, which was approved some twenty years later in Kitchen v. Smith (101 Pa. St. 452), he stated, among other things:
    "By articles of agreement of October 30, 1837, he (Peterson) leased the premises to Kier for purposes of salt wells * * *. The rent reserved was every twelfth barrel of salt made on the premises. It was in effect and substance a sale of the crude salt in the land for one-twelfth of the manufactured article. Now there is no doubt that the absolute owner of land may sell a partial interest in it as well as the whole. He may sell the surface and retain the minerals or he may sell the minerals and reserve the surface.

    But it is self evident that when he carves out a particular interest and sells it, he retains the rest as absolutely as before he conveyed a part * * *. There is not a word in the instrument which imports his intention to part with anything more than the salt in the land * * *. Every matter and thing in and pertaining to the land which was not conveyed to the Kiers by that instrument was retained by Peterson.

    * * * I hold Peterson entitled to compensation for the value of his oil and I suppose a bill in equity for account, would be his most natural and efficacious remedy."

    And in the case of Genet v. Delaware & N. Canal Company (163 N.Y. 173; 57 N. E. 297), a lease had been made for the purpose of mining coal, which contained a provision that a royalty was to be paid of 12 1/2 cents per ton for all merchantable coal mined on the land, and the lease in specific terms defined what the parties understood and agreed to be merchantable coal, in substance. that it was to be of good quality, and the average coal taken from other mines and sent to market by the party of the second part; and that such coal as would not pass through a one-half inch mesh was not merchantable, and was not sent to market, but was considered a waste product, but coal passing through the one-half inch mesh was thrown upon a culm pile and considered as waste. However, a
 


 

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DEPARTMENT OF THE INTERIOR

AUGUST 21, 1934

subsequent to the execution of the contract, on account of changes in the requirement of the coal market and now mechanical invention, such waste coal became valuable, and the lessee commenced to market this waste coal and use it in the operation of its own engines. It was the contention of the lessor under the contract that the lessee had no interest in this waste coal, and that the title to the waste coal passing through the one-half inch mesh was in the lessor, and, as plaintiff in the action, she sought to recover.

    The contention of the defendant was that under the agreement it acquired title to all of the coal, and that the provision that it should pay royalty only on coal of the specified size was not deemed as payment for such coal alone, but for all coal, including the waste coal. The court in deciding the case held:

    "Yet though the coal may have been of somewhat inferior quality or mined at some what greater expense than other coal, its mining may have been most profitable to the appellant. No distinction can be drawn between the two provisions; one, that the coal shall not pass through a half-inch mesh; and the other, that it shall be merchantable. If the appellant's contention is correct, then on all this coal, profitable as its mining may have been, the defendant is exempt from the payment of royalty, while if the plaintiff's claim is to prevail, she was entitled to all this coal, and the defendant could take none of it, though its labor in mining and preparing the coal had contributed probably nine-tenths of its value. Doubtless, persons might make a contract in accordance with the claim of the plaintiff or that of the defendant, but no such unnatural and unreasonable intention should be ascribed to the parties unless expressed in language too plain to admit of misconstruction * * *

    The limitation in the provision for the payment of royalty, with reference to the coal being merchantable and above a specified size, should be considered as of the same nature as those which relieve the lessee from the further prosecution of mining operations. They are merely privileges or options afforded the defendant, of which it might avail itself or not, as it saw fit. Mining might become unprofitable; but this of itself would not terminate the contract. The lessee, nevertheless, could still continue the prosecution of the work in the expectation that the situation would change; but if it did take out coal, the obligation rested upon it to pay the royalty for it. The same is true, in our opinion, as to the provisions relating to the size and merchantable character of the coal. The lessee was not obliged to take coal of inferior size or quality; but it had the right to take such coal if it chose, in which case it was bound to pay royalty on it the same as upon other coal."

    Other interesting cases of similar import will be found collected at pages 131 to 135, inclusive, of volume 1 of Barringer and Adams' excellent work entitled "The Law of Mines and Mining in the United States", such cases being cited in support of the general proposition that:
"When one or more minerals are mentioned in the lease, the lessee will be confined to the extraction of these alone, and if in the course of mining he extract others, he will be held liable to compensation and account for their value to the lessor, and will be enjoined from further removal of them. This is true whether the unenumerated minerals escape by reason of their own force * * * or are purposely or accidentally removed by the labor of the lessee".
    The Department of Justice has taken the position that cases such as the foregoing are without application in determining the liability of the Eagle-Picher Company for its action in utilizing the sulphur content in the lead and zinc ores or concentrates. I am unable to agree with that view. The guiding principle in all these cases, which is equally applicable here, is that the lessee should not be permitted to convert to his own use any product belonging in its original state to the lessor, without compensating him therefor. The royalty payment made by the Eagle-Picher Company, based as it is upon the metallic content of the ores or concentrates, cannot properly be regarded as a payment for the sulphur. It may be that the Eagle Picher Company could not be held to be obligated to install the necessary appliances for utilizing and saving the sulphur content, but having elected to do so, it would appear to be bound, upon principles stated and applied in the foregoing cases, to pay to the lessor his share of the product. If the lease be regarded as not covering such a substance, then the lessor would be entitled to an accounting for the value of the utilized product. On the other hand, if the sulphur be regarded as a component part of the lead and zinc ores or concentrates, then
 


 

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OPINIONS OF THE SOLICITOR

AUGUST 28, 1934

the lessor would be entitled to receive royalties thereon at the rate prescribed in the lease. To hold that the lessee, under a lease covering lead and zinc only, may take and appropriate to his own use, without compensation, other valuable products or substances seems an inequitable and arbitrary conclusion lacking any sanction in law. In any event the controversial issues involved can only be settled by a judicial decision, and submission of these issues to the courts for that purpose appears to be fully justified by the decisions hereinbefore cited, which disclose a persistent and settled policy on the part of the courts to require the lessees to compensate the lessor for products taken from his land.

THE QUESTION OF WHETHER SUIT
SHOULD BE INSTITUTED BY THE UNITED
STATES OR BY THE INDIANS THROUGH
PRIVATE COUNSEL

    In view of the duty resting upon the Government to safeguard and protect the property rights of its Indian wards, it is my opinion that such suits as may be necessary should be begun and prosecuted by the United States. An administrative rule declining so to do would not only appear to be inconsistent to that duty but would also subject the Indians to the risk of failure to obtain a trial upon the merits due to the possibility that a plea to the jurisdiction on the ground that the United States is a necessary party might prove successful.

    In conclusion, it is respectfully recommended that the Attorney General be requested to reconsider his decision to abandon the prosecution of any claim against the Eagle-Picher Company based upon the alleged invalidity of the commercial lease of 1912 on the Mary Whitebird allotment, or to recover from the company any part of the proceeds derived from utilization by the company of the sulphur content in the lead and zinc ores. It is further recommended that the Attorney General be urged to bring an appropriate suit for the purpose of obtaining final judicial determination of the claims of these Indians on their merits. I am informed that similar claims are involved in numerous other leases on Quapaw restricted lands, and with a view to avoiding a multiplicity of suits it is suggested that the Mary Whitebird case, which presents the three main issues involved, be selected as a test case and prosecuted to a final decision, pending which, all other cases of a like nature should be suspended.

                                                                                                                                            NATHAN R. MARGOLD,

Solicitor.

KIOWA--SALE OF LAND BY MINOR


August 28, 1934.


Memorandum to the Commissioner of Indian Affairs:

    I am returning without approval your letter of August 16, regarding a proposed sale by James Pauquodle, an Indian, to School District No. 33, Carnegie, Oklahoma, a tract of land under the jurisdiction of the Kiowa Indian Agency in Oklahoma.

    The land was allotted to Kaut-tna, Kiowa Allottee No. 2532, and descended upon the death of the allottee to Pauquodle, who devised the same to James Pauquodle. The latter is an Indian, and the land is still held in trust.

    James Pauquodle, though a minor 19 years of age, has executed a deed conveying the land to the school district under authority of a judgment of the district court of Caddo County, Oklahoma, purporting to confer upon him the rights of majority.

    It is the general rule recognized by both State and Federal courts that the State laws are without application to the Indians unless specially made so by act of Congress and that the congressional enactments dominate the provisions of the State laws. See Sperry Oil and Gas Company v. Chisolm (264 U.S. 488), Blansett v. Cardin (256 U.S. 319). The act of Congress of May 27, 1902 (32 Stat. 245, 275), dealing with the sale of inherited Indian lands, provides that in the case of minors,

"Their interests shall be sold only by a guardian duly appointed by the proper court upon the order of such court, made upon a petition filed by the guardian, but all such conveyances shall be subject to the approval of the Secretary of the Interior."
In view of this provision and in the absence of any Federal statute conferring upon the State courts of Oklahoma jurisdiction to confer rights of majority upon minor Indians under the jurisdiction of the Kiowa Agency, the capacity of James Pauquodle to execute the deed under consideration is so seriously questionable as to suggest the advisability of having the conveyance made in conformity with the Federal statute. See in this connection Truskett v. Glosser (236 U.S. 223), holding that a lease made by the guardian of a minor member of the 5 Civilized Tribes was superior to one made by the minor during minority but after removal of disabilities by a State court.

                                                                                                                                            NATHAN R. MARGOLD,

Solicitor.


 

436

DEPARTMENT OF THE INTERIOR

SEPTEMBER 6, 1934

RESTRICTIONS ON ALIENATION--EASEMENTS

September 6, 1934.
Memorandum to the Commissioner of Indian Affairs:

    I am returning a proposed letter to Superintendent Upchurch of the Tulalip Indian Agency, approving a deed by a restricted Indian, covering a right of way for a ditch across the Indian's land.

The letter states that:

"As the deed merely conveys a right of way over the surface, and does not affect the fee title, it is not believed that the prohibition against the sale of Indian land embodied in the Wheeler-Howard Act applies thereto."
    This conclusion is probably sound. Section 4 of the Wheeler-Howard Act provides:
"Except as herein provided, no sale, devise, gift, exchange, or other transfer of restricted Indian lands or shares in the assets of any Indian tribe or corporation organized hereunder, shall be made or approved; * * *"
This section probably has no application to estates less than a fee. Plainly it was not intended and does not apply to leases of restricted land. And though an easement deed conveys a qualified fee to the surface, this section plainly has no reference to such types of alienation. The abuses incident to free alienation of Indian lands do not arise in connection with the granting of rights of way.

    It is not sufficient, however, to find that this conveyance is not included within the prohibition of Section 4 of the Wheeler-Howard Act. This land is subject to restrictions on alienation and by the terms of Section 2 of the Wheeler-Howard Act this restriction is indefinitely continued. The grant of an easement deed, quite as much as a lease, is an alienation, and in the absence of a statute authorizing such an alienation is within the prohibition of the restrictions. Authority to grant a right of way of the kind involved here is contained in the act of March 3, 1891 (26 Stat. 1101), and the act of February 15, 1901 (31 Stat. 790), and the regulations prescribed by the Secretary of the Interior pursuant thereto. The procedure prescribed by these statutes and the regulations issued thereunder have not been followed in this case, and the deed accordingly cannot be approved.

    This case is plainly distinguishable from the one recently presented by the request for a right of way for telephones lines on Pueblo lands. Granting of such rights of way is governed by Section 319 of U.S. Code, Title 25, and the procedure for acquiring such rights of way differs from that applicable to the instant case.

                                                                                                                                            NATHAN R. MARGOLD,

Solicitor.

 
NATIONAL INDUSTRIAL RECOVERY ACT--
AUTHORITY OF OIL ADMINISTRATOR
ON INDIAN LANDS
September 6, 1934.

 Memorandum to the Commissioner of Indian Affairs:

    I am returning a proposed letter to Superintendent Ellis of the Osage Indian Agency regarding the question of jurisdiction of the Oklahoma Corporation Commission over questions of oil production on the Osage Reservation.

    The letter states:

"* * * It is not believed that the National Industrial Recovery Act under which the oil code was prescribed took away any of the guardianship jurisdiction of the Secretary of the Interior over Osage matters. Enlarged jurisdiction and authority over the production of crude oil in the United States, including Indian lands, has, however, been given the Secretary as Petroleum Administrator under the oil code."
These statements are somewhat ambiguous and do not make it clear whether the Indians are bound by production requirements established by, or under authority of the Petroleum Administrator.

    It is true that the Corporation Commission of Oklahoma has no independent jurisdiction over production of oil on Indian reservations. It seems plain, however, that the oil code, promulgated pursuant to the authority of the National Industrial Recovery Act, is applicable to such production. The Petroleum Administrator has considered the code applicable to Government owned lands and there is no reason for distinguishing Indian reservations. The problem of oil production with which the oil code deals is the same whether the lands are owned by Indians or whites and the production on Indian owned lands has obviously a direct bearing on the problem of oil production generally.

    To date the Petroleum Administrator has not
 


 

437

OPINIONS OF THE SOLICITOR

SEPTEMBER 12, 1934

seen fit to prescribe independent rules to govern production on Government or Indian owned lands, but has left the entire question of proration among the individual producers within the State allowable to the State authorities. The proration production of Indian owned lands is subject to the orders of the Corporation Commission of Oklahoma in so far as such orders are approved by the Petroleum Administrator. Such orders, depending as they do on the approval of the Petroleum Administrator, are subject, of course, to review by the Administrator.

    The letter which I am returning reaches these conclusions, but it seems advisable to restate the reasons given therefor in order to eliminate the ambiguity in the sentences quoted above. While the distinction between the Secretary of the Interior setting as guardian of the Indians and acting as Petroleum Administrator may be only technical, elimination of the ambiguity noted will help to clarify the thought.

                                                                                                                                              NATHAN R. MARGOLD,

Solicitor.
DISBURSEMENT OF FUNDS
September 12, 1934.
Memorandum for the Commissioner of Indian Affairs:

    I am returning the proposed draft of rules and regulations covering the disbursement of funds appropriated by the act of March 3, 1933 (47 Stat. 1488), entitled "An Act for the relief of the Uintah, White River, and Uncompahgre Bands of
Ute Indians of Utah, and for other purposes."

    Ordinarily the method of disbursement of restricted individual Indian moneys is governed solely by the regulations issued by the Department of the Interior. In a few instances, however, Congress has seen fit to prescribe the method and manner of disbursement of such funds. The act of March 3, 1933, in my opinion, is such a case. Section 2 provides:

    "The funds when so deposited to the credit of each individual Indian shall become immediately available for the purpose of improving their lands, the erection of suitable homes, the purchasing of building material, farming equipment, livestock, feed, food, seed, grain, tools, machinery, implements, household goods, bedding, clothing and any other equipment or supplies necessary to enable the Indians to feed themselves or to engage in farming, livestock industry, or such other pursuits or avocations as will enable them to become self-supporting, under such rules and regulations as may be prescribed by the Secretary of the Interior for their actual benefit and welfare: Provided, That in cases of the aged, infirm, decrepit, or incapacitated members their shares may be used for their proper maintenance and support in the discretion of the Secretary of the Interior".
    It is plain that Section 2 was designed to direct the expenditures of the Indian moneys so as to assure permanent improvements. The money was intended generally for what might properly be called capital investments as distinguished from current expenditures. In a memorandum to the Indian Affairs and forwarded to the Chairman of the House Committee on Indian Affairs it was observed:
    "This disposition of the money, as set forth in Section 2 of the bill, is believed to be of much more benefit to them (the Indians) than to pay same out in cash per capita payments, either in one payment or over a period of years, as the general experience has been that cash per capita payments are frittered away without any permanent benefit".
    The same thought was set forth in almost identical language in the House report accompanying the bill.

    The legislative history set forth indicates that the Indian Office and the Congress were anxious to avoid the waste involved in the making of per capita payments. It seems also plain that the act was designed to limit the use of these funds for the purpose of current "maintenance and support" as distinguished from "permanent improvements". A proviso in Section 2 limits the expenditure of these moneys for the purpose of "maintenance and support" to cases of "aged, infirm, decrepit, or incapacitated members" of the Indian tribes concerned.

    The only reasonable conclusion is that these funds can be expended only for the purposes specified in Section 2. The purposed regulations leave the way open for evasion of this limitation. They were plainly modeled after the individual Indian moneys regulations, approved by the Secretary of the Interior on January 30, 1928. In promulgating these latter regulations the Secretary of the Interior was not limited by the terms of any statute and
 


 

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DEPARTMENT OF THE INTERIOR

SEPTEMBER 15, 1934

these regulations cannot furnish a safe guide in the instant case. Regulation No. 2 of the proposed draft, for example, leaves the way open for the expenditures of these funds for any purpose approved by the Indian Office, and Regulation No. 13 provides that claims against the estates of deceased Indians may be paid (1) if previously authorized * * * (3) if elsewhere herein authorized". In other words, the Indian Office would honor any claim against an Indian estate for an authorized expenditure whatever its nature. Without examining the proposed draft in further detail, enough has been set forth to indicate that these regulations must be redrafted to conform to the limitations imposed by Section 2. The redraft should also take note of the limitations imposed by Section 3, requiring the consent of the parents in the case of expenditure of moneys on behalf of minors, and Section 4, prohibiting expenditure of any of this money for the payment of "any debt or debts contracted prior to the passage of this act". It will be enough to set forth the terms of Sections 3 and 4 in the regulations.

Solicitor.

 
FIVE TRIBES--PARTITION OF INHERITED LANDS
September 15, 1934.

 Memorandum for the Commissioner of Indian Affairs.

    I am returning for further consideration your letter of September 9 to Senator Thomas presenting the question of whether certain lands inherited by Indians of the Five Civilized Tribes of seven-eighths blood are subject to partition under the provisions of section 2 of the act of June 14, 1918 (40 Stat. 606).

   You take the position that as to heirs of more than one-half blood the restrictions resting on the lands in the hands of the deceased allottee are preserved by section 1 of the act of January 27, 1933 (47 Stat. 777), and that therefore the lands are not subject to partition by the Oklahoma courts.

    Section 2 of the act of June 14, 1918, supra, provides:

    "The lands of full blood members of any of the Five Civilized Tribes are hereby made subject to the laws of the State of Oklahoma, providing for the partition of real estate. Any land allotted in such proceedings to a full blood Indian. or conveyed to him upon his election to take the same at the appraisment, shall remain subject to all restrictions upon alienation and taxation obtaining prior to such partition. In case of sale under any decree, or partition, the conveyance thereunder shall operate to relieve the land described of all restrictions of every character."
    The foregoing provision expressly subjects the lands of full-blood members of the Five Civilized Tribes to the laws of Oklahoma with respect to the partition of real estate. There is no express repeal of this provision in the act of January 27, 1933, nor is there any indication in that act that Congress intended to repeal the prior law so as to withdraw these lands from the partition laws of Oklahoma and such a repeal may not be presumed and ought not to be implied unless there is such repugnancy that the two laws may not operate harmoniously. I find no such repugnancy. Where, as here, the deceased allottee was a full blood, the lands are subject to partition under the Oklahoma law but the parcels allotted in the partition proceedings to a full blood remain expressly subject to all restrictions against alienation and taxation obtaining prior to partition. This effectually preserves the existing restrictions where the heirs are of the full blood. The act contains no similar direction with respect to heirs of less than the full blood because there were no restrictions resting on the lands in the hands of such heirs at the time of the enactment of 1918. The restrictions on this class of heirs, however, where they are of one-half or more Indian blood are preserved by section 1 of the act of January 27, 1933, supra, and in virtue of that act the lands allotted to such heirs in partition proceedings remain impressed with the same restrictions against alienation and taxation which obtained prior to partition unless the partition deeds themselves operate to remove the restrictions. See in this connection United States v. Hale (39 Fed. 2d., 188): 51 Fed 2d, 629. To prevent that result, the partition deeds should contain appropriate provisions to the effect that they shall not be construed to remove any existing restrictions against alienation or taxation.

    In order that these Indians may be assured of the protection Congress intended that they should have, I suggest that all cases, involving partition of restricted lands inherited. by heirs of one half or more Indian blood in which notice is served on the Superintendent of the Five Civilized Tribes under the act of April 12, 1926 (44 Stat. 239), be transferred to the Department of Justice with recommendation that the cases be removed to the Federal court. Where partition actions have been filed
 


 

439

OPINIONS OF THE SOLICITOR

SEPTEMBER 17, 1934

and notice has not been served on the Superintendent under the act of 1926, the probate attorneys should be instructed to bring the cases to the attention of your office so that appropriate action looking to their removal to the Federal court may be taken. In presenting both classes of cases to the Department of Justice it should be explained that our interest is not only directed to the preservation of the existing restrictions but that in the event the lands are sold pursuant to a finding that they are not susceptible of partition in kind, it is our desire to have the proceeds of sale delivered to the Superintendent for the Five Civilized Tribes for the use and benefit of the restricted heirs.

Solicitor.

 
TEMPORARY WITHDRAWAL OF SURPLUS
TRUST LANDS
September 17, 1934.

 Memorandum to the Secretary:

    The United States holds in trust for the Indians surplus lands of certain Indian reservations. These surplus lands have been heretofore opened to settlement and entry, the proceeds of the sales being credited to the Indians as the sales are made. The Commissioner of Indian Affairs has recommended the temporary withdrawal of these lands from settlement or entry and this recommendation has been approved by the Commissioner of the General Land Office. You have submitted the recommendation for my consideration.

    Section 3 of the so-called Wheeler-Howard Act (S. 3645) provides:

    "The Secretary of the Interior, if he shall find it to be in the public interest, is hereby authorized to restore to tribal ownership the remaining surplus lands of any Indian reservation heretofore opened, or authorized to be opened, to sale, or to any other form of disposal by Presidential proclamation, or by any of public-land laws of the United States:. . ."
    S- 3645 was a substitute measure for S. 2755, introduced in the same term. Section 3 of Title III of the latter measure contained an authorization similar to that of S. 3645 set forth above and conferred the additional authority to reopen the surplus lands to settlement or entry under specified circumstances. The provision authorizing the re-opening of the surplus lands to settlement or entry was omitted from section 3 of the Wheeler-Howard Act as finally enacted. It was probably the intention of Congress to make permanent any withdrawals made pursuant to the authority of section 3 of the Wheeler-Howard Act and it is therefore doubtful whether section 3 authorizes the temporary withdrawal, as recommended.

    The Secretary of the Interior enjoys adequate authority aside from section 3 of the Wheeler Howard Act to make the temporary withdrawal of the lands in question. The authority of the Executive temporarily to withdraw lands from the public domain for public purposes, implied by the Supreme Court from long usage in Midwest Oil Company v. United States, 236 U.S. 459, was given express confirmation by the Congress in the Act of June 25, 1910 (36 Stat. 847). The authority to make temporary withdrawals under the Act of June 25, 1910, was expressly saved in the Act of March 3, 1927 (44 Stat. 1347). Section 4 of the latter provides:

    "That hereafter changes in the boundaries of reservations created by Executive order, proclamation, or otherwise for the use and occupation of Indians shall not be made except by Act of Congress: Provided, That this shall not apply to temporary withdrawals by the Secretary of the Interior."
    The Act of June 25, 1910, it is true, relates to "public lands" and for some purposes the lands in question have been held to be "Indian" rather than "public" lands. Ash Sheep Company v. United States, 252 U.S. 199. But these lands differ from the name of the public domain only in the fact that the Indians enjoy the beneficial ownership; the manner and method of entry and settlement is the same for these as for public lands generally. For the purpose of the Act of June 25, 1910, any distinction between these lands and public lands generally has been disregarded in administrative practice. The Secretary of the Interior has on several occasions made temporary withdrawal of the lands of the character now under consideration. The propriety of such notion is no longer open to question.

    Considerations of policy favor the proposed withdrawal. One of the two principal purposes of the Wheeler-Howard Act was the conservation of the Indian lands. In part that end was to be achieved by the termination of the allotment system and the indefinite continuation of existing restrictions on alienation of individual holdings. In part the purpose was to be achieved by the permanent withdrawal of "tribal" lands, heretofore open to white settlement, for the permanent use of Indians. The
 


 

440

DEPARTMENT OF THE INTERIOR

SEPTEMBER 17, 1934

demand of white settlers for Indian lands and the demand of the States for taxes were in effect considered and rejected by the Congress in the passage of the Wheeler-Howard Act. They should now be disregarded by the Secretary of the Interior.

    The proposed withdrawal is authorized by law and is sound in policy. In view of the doubt as to the authority of the Secretary to make a temporary withdrawal under section 3 of the Wheeler-Howard Act it is recommended that the Act of June 25, 1910, be cited for withdrawal should the recommendation of the Commissioner of Indian Affairs receive your approval.
 

Solicitor.

 
STANDING ROCK--MORTGAGE ON RESTRICTED LANDS
October 2, 1934.

 Memorandum for the Commissioner of Indian Affairs:

    I am returning your letter of September 26 to the Superintendent of the Standing Rock Indian Agency suggesting that a mortgage on certain restricted lands owned by Sophie and Elizabeth Ironhorn, minor Indians, may be approved when executed by the legal guardian of the minors.

    It appears that a letter containing a similar suggestion, addressed to the Superintendent of the Rosebud Indian Agency, was approved by the Department on September 6, 1934.

    Inasmuch as the execution of a mortgage may result in the absolute transfer of the title under foreclosure proceedings, such an instrument executed while the land is restricted is plainly in violation of section 4 of the Wheeler-Howard Act, declaring that:

"Except as herein provided, no sale, devise, gift, exchange or other transfer of restricted Indian lands * * * shall be made or approved."
    The present letter cannot, therefore, be approved and the erroneous advice previously given the Rosebud Superintendent should be corrected.

    The lands involved in the present case were allotted to Charles Ironhorn, Jr., and were patented in fee simple to him in 1918. In 1922 he executed two deeds conveying a 160-acre tract to each of his minor children, Sophie Ironhorn and Elizabeth Ironhorn. Both deeds contained restrictions prohibiting alienation or encumbrance without the consent of the Secretary of the Interior. Notwithstanding these conveyances the land remained subject to taxation by the State (See Shaw v. Gibson-Zahniser Oil Corporation, 276 U.S. 575; Work v. Mummert, 29 Fed (2d) 393), and it appears that taxes assessed against the lands are now delinquent in the amount of $600. As the Indians are without funds with which to pay the taxes, Mr. Ironhorn has made application for a Federal Land Bank loan in the amount of $1000 which appears to have been approved provided the land is reconveyed to him. While it is not permissible under section 4 of the Wheeler-Howard Act to approve a reconveyance of a mortgage thereon during the restricted period, the act does not prevent a removal of restrictions by the Secretary of the Interior under the authority conferred upon him by the condition contained in the deeds. If in your opinion the exigencies of the case so justify, it is suggested that consideration be given to the removal of restrictions from such part of the land as needs to be mortgaged in order to raise the amount required to pay the taxes, such removal of restrictions to be effective upon the execution of the mortgage by the legal guardian of the minor Indians.

                                                                                                                                              NATHAN R. MARGOLD,

Solicitor.
OSAGE--GRANT OF RIGHT-OF-WAY THROUGH
TRUST LANDS
October 3, 1934
Memorandum to the Commissioner of Indian Affairs.

    I am returning your letter of September 29, declining to approve an instrument executed by Eddie Penn, an Osage Indian, granting a right of way for a public highway to the county of Tuney and the State Highway Commission of Missouri and recommending that the map of definite location of the highway be approved as a revocable permit.

    The proposed action appears to be induced in part by the fact that the right of way act of 1901 is inapplicable to the class of land here involved and in part by the thought that approval of the right of way grant executed by Mr. Penn is not permissible under the provisions of the Wheeler-Howard Act. In the latter connection I note your statement that,

    "Although a permit in form, the instrument is, in effect, the grant of a perpetual right-of-way. Hence, in view of the indefinite extension of the restrictions embodied in the Indian Reorganization Act, it is not believed that same should be approved.
that certain of its sections, including Section 2, Section 13 of the Wheeler-Howard Act provides
 


 

441

OPINIONS OF THE SOLICITOR

OCTOBER 12, 1934

extending indefinitely the trust or restricted period to which Indian lands were subject on the date of the act shall not apply to the Osage Tribe of Indians in Oklahoma or its members. Eddie Penn is a member of the Osage Tribe. He does not appear to be affiliated with any other Indian tribe to which the act applies. The land involved is located in the State of Missouri and was conveyed to Mr. Penn by deed prohibiting alienation or incumbrance without the approval of the Secretary of the Interior. The land is not located within any Indian reservation to which the Wheeler-Howard Act applies and nothing contained in that Act prevents the Secretary of the Interior from giving approval to the right of way grant as required by the condition contained in the deed conveying the land to Mr. Penn.

                                                                                                                                             NATHAN R. MARGOLD,

Solicitor.

PAPAGO--WHEELER-HOWARD ACT


October 12, 1934.
Memorandum for the Secretary:

    Section 3 of the act of June 18, 1933 (Public No. 383-73d Congress), commonly referred to as the Wheeler-Howard Act, reads:

    "The Secretary of the Interior, if he shall find it to be in the public interest, is hereby authorized to restore to tribal ownership the remaining surplus lands of any Indian reservation heretofore opened, or authorized to be opened, to sale, or any other form of disposal by Presidential proclamation, or by any of the public-land laws of the United States: Provided, however, That valid rights or claims of any persons to any lands so withdrawn existing on the date of the withdrawal shall not be affected by this Act: Provided further, That this section shall not apply to lands within any reclamation project heretofore authorized in any Indian reservation: Provided further, That the order of the Department of the Interior signed, dated, and approved by Honorable Ray Lyman Wilbur, as Secretary of the Interior, on October 28, 1932, temporarily withdrawing lands of the Papago Indian Reservation in Arizona from all forms of mineral entry or claim under the public land mining laws, is hereby revoked and rescinded, and the lands of the said Papago Indian Reservation are hereby restored to exploration and location, under the existing mining laws of the United States, in accordance with the express terms and provisions declared and set forth in the Executive Orders establishing said Papago Indian Reservation: Provided further, That damages shall be paid to the Papago Tribe for loss of any improvements on any land located for mining in such a sum as may be determined by the Secretary of the Interior but not to exceed the cost of said improvements: Provided further, That a yearly rental not to exceed five cents per acre shall be paid to the Papago Tribe for loss of the use or occupancy of any land withdrawn by the requirements of mining operations, and payments derived from damages or rentals shall be deposited in the Treasury of the United States to the credit of the Papago Tribe: Provided further, that in the event any person or persons, partnership, corporation, or association, desires a mineral patent, according to the mining laws of the United States, he or they shall first deposit in the Treasury of the United States to the credit of the Papago Tribe the sum of $1.00 per acre in lieu of annual rental, as hereinbefore provided, to compensate for the loss or occupancy of the lands withdrawn by the requirements of mining operations: Provided further, That patentee shall also pay into the Treasury of the United States to the credit of the Papago Tribe damages for the loss of improvements not heretofore paid in such a sum as may be determined by the Secretary of the Interior, but not to exceed the cost thereof; the payment of $1.00 per acre for surface use to be refunded to patentee in the event that patent is not acquired.

    Nothing herein contained shall restrict the granting or use of permits for easements or rights-of-way; or ingress or egress over the lands for all proper and lawful purposes; and nothing contained herein, except as expressly provided, shall be construed as authority for the Secretary of the Interior, or any other person, to issue or promulgate a rule or regulation in conflict with the Executive Order of February 1, 1917, creating the Papago Indian Reservation in Arizona or the Act of February 21, 1931 (46 Stat. 1202.)"

Section 18 of the act reads:

    "This Act shall not apply to any reservation wherein a majority of the adult Indians,
 
 


 

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voting at a special election duly called by the Secretary of the Interior, shall vote against its application. It shall be the duty of the Secretary of the Interior, within one year after the passage and approval of this Act, to call such an election, which election shall be held by secret ballot upon thirty days' notice."

    Before voting upon the application of the act as required by section 18, the Papago Tribe of Indians in Arizona have asked for advice as to whether a vote by them against the entire act will operate to nullify the third and succeeding provisos to section 3 above.

    The question is a different one, and a strong showing can be made in support of both sides of the argument.

    I. The argument in support of the contention that the proviso is law irrespective of the Papagos' consent is, briefly, as follows:

    Section 18, literally read, supports the view that the act, in its entirety, may be accepted or rejected by the Indians, and that in the event of rejection no part of the act applies to that particular tribe. Statutes are not to be so literally construed, however, as to defeat the purpose of the lawmakers. United States for the use' of Hill v. American Surety Company (200 U.S. 197). Hence, if Congress intended that any particular provision or section of the Wheeler-Howard Act should stand as permanent legislation independent of any action by the Indians accepting or rejecting it, full effect must be given to that intent.

    The third and succeeding provisos to section 3 deal with mineral rights on the Papago Reservation and will hereinafter be referred to as the Papago amendment.

    The Papago Reservation was created by Executive Order of February 1, 1917, modifying a previous Executive Order of January 14, 1916. The rights of the Papago Indians under both orders were confined to the surface, and the mineral lands were expressly declared to be subject to exploration, location and entry under the mining laws of the United States. The reservation created by the Executive Orders consisted of two large tracts separated by a strip of public domain about six miles wide, commonly referred to as the "Six Mile Strip." By the Act of February 21, 1931 (46 Stat. 1202), all of the vacant public lands within this strip were added to the reservation. This addition was also made exclusive of any tribal right to the minerals and provided that the lands shall be subject to disposition under the mining laws as provided in the Executive order of February 1, 1917. Former Secretary Wilbur, on October 28, 1932, signed an order withdrawing the mineral lands in the reservation from disposition, the order reciting that it was temporary only and designed to give Congress an opportunity to determine whether such withdrawal should be made permanent. This action by Mr. Wilbur met with bitter protest, and strong pressure was brought to bear on the Department, with a view to having the Wilbur order vacated. It was inevitable that this controversy, notwithstanding the fact that it was wholly foreign to the general scope and purpose of the Wheeler-Howard Bill, should inject itself into the deliberations on that measure. The result was that during the closing days of the session of the last Congress, the Papago Amendment was added. Particular attention is directed to the statements of Senator Ashurst in support of the Papago amendment, which he introduced, such statements appearing at pages 11465 to 11471, inclusive, and 11474 of the Congressional Record of June 12, 1934 (temporary paging). After reviewing the history of the Papago mineral controversy and pointing out that the Papagos had no legal right to the minerals underlying their reserve-a conclusion which is supported by my opinion of March 7, 1934-and that the Secretary, in issuing the order of October 28, 1932, had usurped a power resting solely in Congress, Senator Ashurst said:

    "No, Mr. President; the prospectors, the miners of the State of Arizona are anxious not to be subjects of public charity, anxious not to be living on the dole, anxious to secure work, want to go out on the reservation and begin to develop and search for minerals. Not only is it a worthy cause, but it is a romantic one, and I think the Senate owes it to itself, owes it to the State of Arizona, owes it to law and proper procedure, to restore these lands to the status they occupied from the day of the Gadsden Treaty until Secretary Wilbur by his ipse dixit presumed to withdraw these lands from entry."
    Nowhere in the discussion of the Papago amendment is there any indication that the action of Congress in enacting the amendment was to be subject to acceptance or rejection by the Indians or anyone else. To the contrary, the discussion before the Senate strongly indicates that enactment of the amendment was to constitute a final disposition of the Papago matter, and such is the plain import of the language of the amendment. It declares in unequivocal language that the order of October 28, 1932, "is hereby revoked and re-
 


 

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scinded" and that the "lands of the said Papago Indian Reservation are hereby restored to exploration and location, under the existing mining laws of the United States, in accordance with the express terms and provisions declared and set forth in the Executive Orders establishing said Papago Indian Reservation." The revocation and restoration are not only absolute and unqualified, but the amendment expressly prohibits the Secretary of the Interior, the Indians or anyone else from disturbing such revocation and restoration by declaring that:

"* * * and nothing contained herein, except as expressly provided, shall be construed as authority for the Secretary of the Interior, or any other person, to issue or promulgate a rule or regulation in conflict with the Executive Order of February 1, 1917, creating the Papago Indian Reservation in Arizona or the Act of February 21, 1931 (46 Stat. 1202)."
    To hold that a vote by the Indians against the application of the act to them operates to nullify the Papago amendment is to accomplish the very thing which the foregoing provision was designed to prevent. The phrase "except as expressly provided" obviously was intended to prevent the exercise of such a power unless expressly conferred. The general provisions of section 18, permitting the Indians to vote for or against the application of the act as a whole, makes no mention of the Papago amendment and cannot be regarded as investing the Indians with the power by an adverse vote to invalidate the amendment. The amendment embraces a matter affecting but one tribe and having no logical relation to the remaining provisions of the act. While injected in the act in the form of a proviso, the Papago amendment appears to fall within that class of provisos frequently used in Federal legislation to introduce new matter permanent in its operation. See Interstate Commerce Commission v. Baird (194 U.S. 25): United States v. Ewing (140 U.S. 142).

    The Wheeler-Howard Act is a comprehensive measure marking the inauguration of a "New Deal" for the American Indian through the conservation and development of Indian lands and resources, the extension to Indians of the right to form business and other organizations, the establishment of a credit system for the Indians, the granting of rights of home rule or self-government, etc. Apartfrom the Papago amendment, the 19 sections of the act are reasonably designated to bring about these results. However, the general policy exemplified by these general provisions of the statute differs widely from past policies, and it must have been the feeling of Congress that the new policy should not be imposed upon any Indian tribe against its will. Section 18 thus appears to have been designed to afford the Indians an opportunity to accept or reject the general provisions of the bill, and this view is measurably reflected by the statement made on the floor of the House by Congressman Howard. See Congressional Record of June 15, 1934, page 12056 (temporary paging):

    "A few Indian tribes asked to be exempted from the provisions of the bill. The committee have thought it unwise to force even home rule and appropriations on tribes unwilling to accept them, and for that reason section 19 provides for a popular referendum among the various tribes within 6 months after the passage and approval of the act. The act shall not apply to any reservation wherein a majority of the adult Indians vote against its application."
    Viewing the Wheeler-Howard Act as a whole and in the light of its obvious policy, it would seem to follow that an adverse vote by the Papago Indians under section 18 will not invalidate the Papago amendment. With this exception, the act must be accepted or rejected in toto.

    II. In support of the opposite contention, the outline of argument is substantially as follows:

    Section 18 of the Wheeler-Howard Act provides that "This Act shall not apply to any reservation wherein a majority of the adult Indians * * * shall vote against its application. * * *" The reference of this section is clear. It deals with "This Act" and not simply with certain sections of this act. Terms of this referendum apply to the entire act. Applying to the entire act it applies to section 3 of the act, which permits the restoration of certain lands to Indian tribal ownership and to the proviso attached to section 3, which restricts the rights of tribal ownership on the Papago Reservation.

    If the language of the section itself left any doubt as to its scope, its position in the act would remove such doubt. Except for the definitions included in section 19, which apply to section 18 as well as to the rest of the act, section 18 is the final section of the act. It is well-established rule of statutory construction that within a single statute a later provision overrides an earlier provision, if there is any repugnancy between the two.

    An analysis of the terms of the act lends weight to the view that the Papago proviso of section 3 cannot be reasonably construed as outside the
 


 

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scope of section 18. Section 18 purports to make certain actions of Congress contingent upon the approval of the Indians concerned. Several of the provisions of the Wheeler-Howard Act are contingent in any event, since they merely authorize action which requires Indian consent. Such provisions are, for instance, sections 16 and 17 and by implication, sections 9 and 10. If the entire act consisted of such optional provisions, a referendum upon the application of the act would have no particular significance. The whole significance of the referendum provision lies in the fact that certain sections of the act are mandatory in character, authorizing or directing the Secretary of the Interior to perform certain acts or prohibiting him from performing certain acts, regardless of the wishes of the Indians. The entire significance of section 18 is found in the possibility recognized by Congress that some of these mandatory provisions might be regarded by the Indians concerned as deleterious, and in the express intent of Congress that if this should prove to be the case the Indians concerned would have the last word in the matter and might reject the entire act.

    It would seem to follow from the foregoing considerations that the language of the act is clear and calls for no extrinsic basis of interpretation. Section 18 permits the Indians of any reservation to except that reservation from the provisions of the act in its entirety if they believe that the act contains provisions detrimental to their welfare. If the Indians of the Papago Reservation believe that section 3 of the act with its proviso directed against their tribal rights is detrimental to their best interests, Congress has given them the necessary means of defense.

    The argumen