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401

OPINIONS OF THE SOLICITOR

MARCH 30, 1934

not for the past. White v. United States (191 U. S. 545); Cameron v. United States (231 U. S. 710), This rule is particularly applicable where, as here, retroactive operation of the statute would result not only in divesting the county courts of Oklahoma of a jurisdiction exercised by them under authority of Congress over a long period of years, but to reimpose restrictions and withdraw from the taxing power of the State of Oklahoma a considerable area of land. An intent to accomplish such a far-reaching result doubtless would be plainly expressed. So far from expressing such an intent, the act of January 27, 1933, contains no indication of a purpose to change the status of the lands of these Indians under the prior laws either by reimposing restrictions theretofore removed or by shifting from the county court to the Secretary of the Interior the jurisdiction to approve conveyance of interests in such lands theretofore vested in full blood Indians. To the contrary, section 8, of the act contains a provision to the affect that no conveyance of any interest in the land of any full blood Indian heir shall be valid unless approved in open court after notice in accordance with the rules of procedure in probate matters adopted by the Supreme Court of Oklahoma in June, 1914. While the purpose of this provision appears to have been to change the function of the county courts in approving conveyances from a ministerial to a judicial act, the recognition thus given to the jurisdiction of those courts in the matter of approving conveyances by full blood heirs evidences a plain purpose on the part of Congress not to disturb the existing jurisdiction of such courts over lands acquired by full blood Indians prior to that enactment. In addition to this, the language employed in the proviso under consideration shows that Congress had in mind transactions occurring after the date of the enactment. Apropos of this is the declaration that "Where the entire interest in any tract of restricted and tax-exempt land * * * is acquired * * * by restricted Indians, such lands shall remain restricted and tax-exempt". This declaration obviously looks to the future and not to the past and discloses a plain intent on the part of Congress to preserve existing restrictions rather than to reimpose restrictions once removed or change the form of existing restrictions. These considerations lead to the conclusion that the proviso related only to lands acquired after the date of the enactment and not to prior acquisitions.

                                                                                                                                            NATHAN R. MARGOLD,

Solicitor.
Approved: March 14, 1934.
OSCAR L. CHAPMAN, Assistant Secretary.

INDIAN TIMBER SALE CONTRACTS

54 I.D. 401

M-27681                                                                                                                              March 30, 1934.

The Honorable,
The Secretary of the Interior.

DEAR MR. SECRETARY:

    On March 13 you referred to me for my consideration and opinion the Washington Pulp and Paper Corporation's application for reduction of the stumpage prices in the Makah tribal timber sale contract covering the Wa-ach timber unit.

    Allowance of the reduction applied for has been forestalled by the Solicitor's opinion of August 8, 1933 (M-27499). In that opinion the Act of March 4, 1933 (Public No. 435, 72 Cong.), was construed and given application in determining the legality of various modifications of existing timber sale contracts proposed or allowed subsequent to March 4, 1933. Included among these modifications was one of applicant's contract. On April 12, 1933, the applicant had applied for a reduction of the stumpage prices in its contract; and on July 7, 1933, the Commissioner of Indian Affairs had proposed to act favorably upon the application. The proposed action was in accordance with the method for stumpage price modifications provided in the contract itself. This contract method does not require consent of the Indians to price reductions effected thereby; and consent of the Indians to the proposed reduction of July 7, 1933, had not been obtained. The Act of March 4, 1933, in so far as pertinent here, provides:

    "That the Secretary of the Interior, with the consent of the Indians involved, expressed through a regularly called general council, and of the purchasers, is hereby authorized and directed to modify the terms of now existing and uncompleted contracts of sale of Indian tribal timber: * * *."
    This act was construed in the Solicitor's opinion of August 8, 1933, to add to the existing law:
    " (1) The power to modify, with the consent of the Indians and of the purchasers, inelastic terms of the contracts, where no provision for change is included in the contracts or Regulations; and

    " (2) The requirement of the consent of the Indians to modifications permitted under the contracts or incorporated Regulations."



 

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DEPARTMENT OF THE INTERIOR

MARCH 30, 1934

The act was construed to authorize any contract modification and to make the consent of the Indians a condition to any contract modification. "Any type of modification of a term of the contract can be made, but the consent of the Indians is a condition thereto." Consequently, the proposed modification of stumpage prices in applicant's contract was declared to be illegal.

    Applicant by his letter of February 12, 1934, to the Commissioner of Indian Affairs has petitioned for further consideration of its application of April 12, 1933, on the ground that the Act of March 4, 1933, should not be construed to require consent of the Indians to a stumpage price modification effected pursuant to express contract provision therefor.

    The opinion rendered herein requires, therefore, consideration of the statutory construction embodied in the Solicitor's opinion of August 8, 1933, with the object of determining whether the Act of March 4, 1933, was therein correctly construed and applied to applicant's contract.

    Such consideration leads to the conclusion that the construction and application of the act to applicant's contract, made in the Solicitor's opinion of August 8, 1933, raises a serious question as to the act's constitutionality. If the act admits of another construction which avoids the constitutional question, then under the applicable rule of statutory interpretation such other construction should be adopted. Consideration of the background and legislative history of the act and the language of the act itself leads to the conclusions that it does admit of another construction, and that this other construction not only avoids the constitutional question but also, without regard to the constitutional question, is the only proper construction of the act which can be made with reference to applicant's contract. These conclusions require the adoption of this other construction.

I

   Applicant's contract was executed prior to March 4, 1933, and pursuant to the Act of June 25, 1910 (36 Stat. 855-857). This 1910 act provides as follows:

    "Sec. 7. That the mature living and dead and down timber on unallotted lands of any Indian reservation may be sold under regulations to be prescribed by the Secretary of the Interior, and the proceeds from such sales shall be used for the benefit of the Indians of the reservation in such manner as he may direct: Provided,That this section shall not apply to the States of Minnesota and Wisconsin."
    The provision of applicant's contract under which a reduction of stumpage prices is sought reads as follows:
    "Upon the presentation by the Purchaser of detailed information, supported by affidavits by a certified public accountant and by the Purchaser, showing that the logging of the said Unit is being conducted at a loss, investigation will be made by forest officers under the directions of the Commissioner of Indian Affairs, for the purpose of ascertaining whether, under existing market conditions, the Purchaser is able, with efficient management, to earn a reasonable profit on the operation. If such investigation shall show to the satisfaction of the Commissioner of Indian Affairs that the operation will not, under efficient management, earn a reasonable profit, he may, in his discretion, relieve the Purchaser from any portion or all of the increase in price over the original contract stumpage price for such period as he shall consider necessary to protect the Purchaser from serious loss on account of adverse market conditions; Provided, that none of the stumpage rates will ever be reduced below the prices specified in the contract for the period ending March 31, 1928; and the Commissioner shall have authority to reimpose any part or all of the increase in prices at any time upon giving notice to the Purchaser, subject to review by the Secretary of the Interior."
    This contract provision gives applicant an administrative recourse against economically unreasonable stumpage prices. True, the provision does not give a right to a price reduction. But it does allow applicant to petition the Commissioner of Indian Affairs for a price reduction, and affords an opportunity for a price reduction by that officer. It is of value and, therefore, forms a substantial consideration for applicant's contractual promises. Applicant is, however, deprived of its value by the Act of March 4, 1933, as construed and applied in the Solicitor's opinion of August 8, 1933. In that opinion the proposed price modification effected pursuant to the contract provision was declared to be illegal; and the applicant was thereby substantially injured. To deny this is to ignore realities.

    Acting pursuant to the contract provision, the applicant applied for a reduction of stumpage prices; and the Commissioner of Indian Affairs, having found that the contract prices were too high to allow applicant a reasonable profit, proposed on July 7, 1933, to make a reduction. This proposed modification of prices was, however, declared to be
 


 

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OPINIONS OF THE SOLICITOR

MARCH 30, 1934

illegal by the Solicitor's opinion of August 8, 1933; and applicant had to continue paying the stumpage prices which had been found by the Commissioner of Indian Affairs to be too high. Subsequently applicant sought modification by the statutory method, but failed to get the consent of the Indians involved. The automatic price increase provision of the contract (against the possible unfairness of which the provision for reduction was undoubtedly inserted) is still operative, and the stumpage prices found by the Commissioner of Indian Affairs to be economically unreasonable will on April 1, 1934, be increased twelve per
centum.

    To construe the Act of March 4, 1933, so as to deprive applicant of the administrative recourse which is one of applicant's contract rights, is to raise a serious question as to the act's constitutionality. It is very questionable whether the statute so construed meets the due process requirements of the Fifth Amendment to the Federal Constitution.

    It is a well established rule of statutory construction that a statute should not be given a construction which raises a serious question as to its constitutionality, if it admits of another construction which avoids the question.

    In the leading case of United States v. Delaware and Hudson Company (213 U.S. 366, 407, 408-1909), the Supreme Court of the United States announced this rule of statutory construction to be that,

"where a statute is susceptible of two constructions, by one of which grave and doubtful constitutional questions arise and by the other of which such questions are avoided, our duty is to adopt the latter."
    This rule was accepted and applied in Addy Company v. United States (264 U.S. 239, 245-1924), and Federal Trade Commission v. American Tobacco Company (264 U.S. 298, 307-1924). In the more recent case of Missouri Pacific Railway Company v. Boone (270 U.S. 466, 471-1926) the rule was recognized as well settled:
    "The action, if so construed (as contended for) would, at least, raise a grave and doubtful constitutional question. Under the settled practice, a construction which does so will not be adopted, where some other is open to us."
    If, therefore, the Act of March 4, 1933, admits of a construction which avoids the constitutional question indicated above, then such construction must be adopted.

II

    Examination of the background and legislative history of the Act of March 4, 1933, shows that the primary legislative intent was to authorize modifications of those Indian timber sale contracts which did not specifically provide for price modifications. It does not reveal any intent to hedge modifications provided for by contract with the requirement of the Indians' consent thereto.

    Most of the Indian timber sale contracts do not contain the provision for reduction of stumpage prices which is contained in applicant's contract. Most of the Indian timber sale contracts do contain provisions for periodic and automatic increases of stumpage prices. When the economic depression overtook many purchasers with contracts under which the stumpage prices were high and were automatically becoming higher and under which there were no contract provisions for price reductions, then, because of the depressed lumber market, logging operations on many Indian timber units ceased. With the cessation of logging the income to the Indians from the sale of the timber ceased,

    The situation thus created was one in which contract modifications would work to the mutual benefit of the parties concerned. The purchasers, of course, would gain by any reduction. The Indians would gain by reductions of stumpage prices great enough to enable the purchasers to resume operations, since she contracts so modified would realize more income for the Indians than would cancellation of the existing contracts and execution of new ones in the depressed buyers' market.

    Since price reductions in those contracts without provision therefor would be to the advantage of the Indians, the Secretary of the Interior, in order to determine his authority in the premises, requested from the Comptroller General his decision on the following points:

    "(1) Has this Department authority to reduce the stumpage prices on contracts for the purchase of Indian timber where it appears that such reduction would be to the advantage of the Indians entitled to the proceeds from such sales, where the contract does not specifically provide that the Commissioner of Indian Affairs or the Secretary of the Interior may reduce prices?

    "(2) If the Department is not authorized to reduce prices as appears to it just and necessary, would the consent of the Indians of any tribe, as expressed by the majority vote of an assembled council, operate to authorize a revision of contracts, upon the theory that all par-
 


 

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DEPARTMENT OF THE INTERIOR

MARCH 30, 1934

ties to the contract or having any beneficial interest in it have agreed to a revision?"

    The Comptroller General in his decision of December 17, 1931, answered both questions in the negative, stating that the authority is question could derive only from express legislation. His opinion was limited to consideration of the question submitted to him; it did not purport to deal with those contracts which include provisions for reduction of prices.

    Finally, the necessary legislative authority was granted by Congress in its Act of March 4, 1933.

    It is true that some statements of Congressmen appearing in the legislative history of the act are general, to the effect that the bill then being debated required consent of the Indians involved to any modification of Indian timber sale contracts. But these statements were made with reference to the modifications which the pending bill authorized and directed. Examination of the Congressional Record not only shows that the legislative debates on this act were primarily concerned with those contracts which did not provide for price reductions and with the proposed authority to modify those contracts, but also shows that there was no legislative intent to require consent of the Indians to modifications of stumpage prices effected pursuant to express contract provision therefor. Congress was concerned with creating authority to modify, not with conditioning authority already existing.

    It should also be noted that the memorandum of the Commissioner of Indian Affairs, which was incorporated into the reports of both legislative committees on Indian Affairs and which formed the basis of much of the legislative debates, was concerned only with the situation created by those contracts which made no provision for price reductions. This memorandum specifically refers to and quotes from the Comptroller General's decision of December 17, 1931, in explaining the necessity of legislation for relief from the situation created by high contract stumpage prices and the depressed lumber market. The limited scope of this Comptroller General's decision has been indicated above.

    The background and legislative history of the act, as indicated above, are not inconsistent with a statutory construction which leaves contract modifications effected pursuant to contract provision therefor unhampered by the act's required conditions.

III

    Although the language of the Act of March 4, 1933, is broad in scope, it does not purport to establish the conditioned authority and direction given therein as the exclusive means of modifying Indian timber sale contracts.

    It undoubtedly includes within its purview contracts which by their own provisions provide for modifications of stumpage prices. It cannot be doubted, I believe, that stumpage price modifications of such contracts effected by the statutory means would be valid. The statute does not, however, make its authority and direction exclusive. No such exclusiveness is expressed in the language of the act; nor is it implied. With reference to those contracts which contain provisions for reduction of stumpage prices, the act is to be construed as furnishing an additional means of modification.

    Different construction of the statute would do violence to its plain purport. It authorizes and directs the Secretary of the Interior, with the consent of the Indians involved and the purchasers, to modify then existing contracts. The act is not self-operating. It does not purport, by its own operation, to modify the contracts in any respect. Yet, if construed to require consent of the Indians to any modification and thereby to alter the price reduction provision in applicant's contract, then the act itself operates to modify the contract. In all probability no purchaser would consent to such a modification of his contract. In my opinion the act which merely authorizes and directs the Secretary of the Interior, with the consent of the Indians and the purchasers, to modify Indian timber sale contracts, cannot properly be construed to modify, by its own operation and without the consent of the purchaser, a contract provision for price reduction.

    For the reasons herein set forth, it is my opinion that the Commissioner of Indian Affairs may consider the Washington Pulp and Paper Corporation's application for reduction of the stumpage prices in its Makah tribal timber contract and may reduce said stumpage prices pursuant to the pertinent contract provision, notwithstanding the required conditions of the Act of March 4, 1933. The Solicitor's opinion of August 8, 1933 (M-27499), is so far as it is inconsistent herewith, is hereby overruled.

                                                                                                                                              NATHAN R. MARGOLD,

Solicitor.
Approved: March 30, 1934.
HAROLD L. ICKES, Secretary of the Interior.
 


 

405

OPINIONS OF THE SOLICITOR

APRIL 5, 1934

FISHING RIGHTS-YAKIMA TRIBES

54 I.D. 418
M-27631                                                                                                                                           April 5, 1934.

The Honorable,
The Secretary of the Interior.

DEAR MR. SECRETARY:

    Certain questions propounded by the Commissioner of Indian Affairs with reference to fishing rights claimed by Yakima Indians at Celilo Falls, Oregon, have been referred to the Solicitor for opinion. The questions are:

    "1. Whether, under their treaty, the Yakima Indians have a right to construct what is known as a "willow weir" across the Columbia River for the purpose of holding the salmon run, and

    2. Whether the Indians must comply with the Oregon State law requiring them to secure a license for the purpose of selling fish caught by them in the Columbia River and to pay a poundage tax on such sales."

    Near Celilo Falls, on the Oregon shore of the Columbia River, is a small Yakima Village called Celilo. For many generations the Columbia River at this point has been a usual and accustomed fishing place of the few Indians who have made their homes at Celilo and of other members of the tribe. Celilo is not within the Yakima Reservation but is upon a seven-acre tract owned by the United States. In 1929, Congress placed this tract under the control of the Secretary of the Interior "for the use and benefit of certain Indians now using and occupying the land as a fishing camp site." (45 Stat. 1158).

    The treaty between the United States and the Yakama (usually designated Yakima) Nation of Indians was concluded January 9, 1855. (12 Stat. 951) Article 3 of that treaty provides that "the exclusive right of taking fish in all the streams, where running through or bordering said reservation, is further secured to said confederated tribes and bands of Indians, as also the right of taking fish at all usual and accustomed places, in common with citizens of the Territory." The nature of the fishing privilege thus reserved at usual and accustomed places outside the Yakima Reservation has been adjudicated by the Supreme Court of the United States.

    "It is not to be doubted that the power to preserve fish and game within its borders is inherent in the sovereignty of the State (Geer v. Connecticut, 161 U.S. 519; Ward v. Racehorse, 163 U.S. 504, 507), subject of course to any valid exercise of authority under the provisions of the Federal Constitution. It is not denied-save as to the members of this tribe-that this inherent power extended over the locus in quo and to all persons attempting there to hunt or fish, whether they are owners of the lands or others. The contention for the plaintiffs in error must, and does, go to the extent of insisting that the effect of the reservation was to maintain in the tribe sovereignty quoad hoc. As the plaintiffs in error put it: 'The land itself became thereby subject to a joint property ownership and the dual sovereignty of the two peoples, white and red, to fit the case intended, however infrequent such situation was to be.' We are unable to take this view. It is said that the State would regulate the whites and that the Indian tribe would regulate its members, but if neither could exercise authority with respect to the other at the locus in quo, either would be free to destroy the subject of the power. Such a duality of sovereignty instead of maintaining in each the essential power of preservation would in fact deny it to both.

    * * * We do not think that it is a proper construction of the reservation in the conveyance to regard it as an attempt either to reserve sovereign prerogative or so to divide the inherent power of preservation as to make its competent exercise impossible. Rather are we of the opinion that the clause is fully satisfied by considering it a reservation of a privilege of fishing and hunting upon the granted lands in common with the grantees, and others to whom the privilege might be extended, but subject nevertheless to that necessary power of appropriate regulation, as to all those privileged, which inhered in the sovereignty of the State over the lands where the privilege was exercised. This was clearly recognized in United States v. Winans, 198 U.S. 371, 384, where the court in sustaining the fishing rights of the Indians on the Columbia River, under the provisions of the treaty between the United States and the Yakima Indians, ratified in 1859, said (referring to the authority of the State of Washington): 'Nor does It' (that is, the right of "taking fish at all usual and accustomed places") 'restrain the State unreasonably, if at all, in the regulation of the right. It only fixes in the land such easements as enable the right to be exercised.' " Kennedy v. Becker, 241 U.S. 556, 562, 562-564 (1916).
 


 

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APRIL 5, 1934

    Accord: United States v. Winans, 198 U.S. 317 (1905); People v. Chose, 252 Mich. 154, 233N.W. 205 (1931).

It follows that a regulation of fishing imposed by a State, operative on all persons alike, reasonably adapted to the preservation of wild life in the waters of the State for the common benefit, and not in its intendment or operation a denial to the privileged Indian community of its right to fish is lawful and not a treaty violation. This principle permits a State to restrict the devices and types of tackle which fishermen generally, including the privileged Indian community, may employ in the waters within its jurisdiction. Kennedy v. Becker, supra; State v. Towessnute, 89 Wash. 478, 154 Pac. 805 (1916); State v. Morris, 136 Wis. 552, 117 N.W. 1006 (1908). The Columbia River is under the concurrent jurisdiction of the States of Oregon and Washington (10 Stat. 90; 11 Stat. 383), and the power of each State to regulate fishing in the river is established. McGowan v. Columbia Packers' Assn., 245 U.S. 352 (1917); Nielson v. Oregon, 212U.S. 315 (1908).

    The first question propounded by the Commissioner of Indian Affairs concerns the use of a "willow wier," a device long employed by the Indians to obstruct a stream in such wise that the salmon run is directed through a particular channel. The Commercial Fisheries Code of Oregon makes it "unlawful for any person or persons to operate or maintain * * * any fish traps, wier * * * or any device * * * used in catching salmon * * * without first having obtained * * * a license therefor." Ore. Code Ann. (1930) Sec. 40-503. See also Sets. 40-309 ff. All funds derived from license fees are employed under the direction of the State Fish Commission in the preservation, propagation and protection of fish, the maintenance of hatcheries and related enterprises. Sec. 40-105. The classification of fishing devices is entrusted to the State Fish Commission. Sec. 40-115. It does not appear that any regulation promulgated by the State Fish Commission discriminates against Indian fishermen. Nor is it claimed that license to employ any device has been refused to Indian fishermen arbitrarily.

    Therefore, answering question 1, it is my opinion that the Treaty of 1885 does not reserve to the Yakima Indians the privilege of constructing a "willow wier" in the channel of the Columbia River at Celilo Falls in disregard of the State laws and regulations above mentioned.

    The second question concerns the right of the State to require the Indians to secure a license for the selling of fish and to require that they pay a poundage tax upon such sales. Such requirements are imposed by the Commercial Fisheries Code and operate equally upon all persons. Sets. 40-501, 40-515. The privilege reserved in the Treaty of 1855 is expressly defined as a "right of taking fish". It can not be construed as a exemption from the general laws of the State taxing and regulating the sale of fish. It does not appear that a license has been required for or a tax imposed upon the sale of fish by the Indians upon their reservation or at any other place under the jurisdiction of the United States. Answering question 2, it is my opinion that no Indian may lawfully sell fish at any place within the jurisdiction of the State of Oregon unless he shall have obtained a license for that purpose and shall pay such tax as the State may impose upon vendors. Of course any discriminatory treatment of Indian vendors in the administration of these regulations would be unlawful.

                                                                                                                                             NATHAN R. MARGOLD,

Solicitor.
Approved: April 5, 1934.
OSCAR L. CHAPMAN, Assistant Secretary.

FIVE TRIBES-QUESTION OF EXPIRATION OF GAS
LEASE AND OF HOLDING OVER BY LESSEE

M. 27654                                                                                                                               April 19, 1934.

The Honorable,
The Secretary of the Interior.

MY DEAR MR. SECRETARY:

    You have requested my opinion upon a question arising out of an oil and gas lease owned by the Deep Rock Oil Corporation on land allotted to Lannie and Lewis Long, deceased full blood Creek Indians.

    The lease was made and approved under authority of section 2 of the act of May 27, 1908 (35 Stat. 312). The period of the lease, as set forth in the granting clause, is five years from the date of approval-November 3, 1920-"and as much longer thereafter as oil or gas is found in paying quantities." Section 2 of the lease provides for the payment to the lessor as royalty on oil of 12 1/2 per cent of the gross proceeds from sales. With respect to gas wells, section 2 of the lease further provides:

  "And the lessee shall pay as royalty on each gas producing well three hundred dollars per annum in advance, to be calculated from the

 

407

OPINIONS OF THE SOLICITOR

APRIL 19, 1934

date of commencement of utilization: Provided, however, in the case of gas wells of small volume, when the rock pressure is one hundred pounds or less, the parties hereto may, subject to the approval of the Secretary of the Interior, agree upon a royalty, which will become effective as a part of this lease: Provided, further, That in case of gas wells of small volume, or where the wells produce both oil and gas or oil and gas and salt water to such extent that the gas is unfit for ordinary domestic purposes, or where the gas from any well is desired for temporary use in connection with drilling and pumping operations on adjacent or nearby tracts, the lessee shall have the option of paying royalties upon such gas wells of the same percentage of the gross proceeds from the sale of gas from such wells as is paid under this lease for royalty on oil. The lessor shall have the free use of gas for domestic purposes in his residence on the leased premises, provided there shall be surplus gas produced on said premises over and above enough to fully operate the same. Failure on the part of the lessee to use a gas producing well, which cannot profitably be utilized at the rate herein prescribed, shall not work a forfeiture of this lease so far as the same relates to mining oil, but if the lessee desires to retain gas producing privileges, the lessee shall pay a rental of one hundred dollars per annum, in advance, calculated from the date of discovery of gas, on each gas producing well, gas from which is not marketed or not utilized otherwise than for operations under this lease. Payments of annual gas royalties shall be made within twenty-five days from the date such royalties become due, other royalty payments to be made monthly on or before the 25th day of the month succeeding that for which such payments is to be made, supported by sworn statements." (Italics supplied.)

    The five-year period of the lease expired on November 3, 1925. No oil had been found. A gas well had been completed April 30, 1925, with an initial capacity of 3,000,000 cubic feet daily. Small quantities of gas were sold from the well during the year 1926 and for that year the lessee paid the fixed royalty of $300. No further sales of gas were made and the well appears to have been shut in since that time. For the year 1926-27 and succeeding years, the lessee has paid annually $100 under that part of section 2 above, giving the lessee the privilege of making such payment for the retention of gas producing privileges in a gas producing well, the gas from which is not marketed or not utilized otherwise than for operations under the lease. The Superintendent for the Five Civilized Tribes has refused to accept these payments in satisfaction of the lessee's obligation under the lease. He expresses the view that where there is but a single gas well on the premises, the payment of $100 for retention of gas producing privileges will not extend the lease beyond the fixed or primary period of five years. He contends that such a well will continue the lease after expiration of the fixed or primary period only where the lessee makes payment of the fixed royalty provided for in the lease for a utilized gas well. The lessee having failed, after notice, to make payment in accordance with this contention, the Superintendent recommends that the lease be canceled.

    The question presented is whether the gas well drilled and completed by the lessee in April, 1925, and the payments made by the lessee thereon, operated to extend the lease beyond the fixed period of five years.

    The lease contains no provision under which it may be extended beyond the fixed or primary period by a mere money payment and no such payment alone can operate to extend that period. See United States v. Brown, 15 Fed. (2d) 565. The $100 payment tendered by the lessee represents, under the terms of the lease, the consideration for retention of gas producing privileges in an unprofitable well, the gas from which is not marketed nor utilized other than for operations under the lease. The provision made for such payment, like many others contained in the lease contract, is operative only while the lease is alive without having any bearing whatsoever upon the duration of the lease. The duration of the lease is governed solely by the granting clause and that clause fixes the period of the lease at five years from the date of approval by the Secretary of the Interior "and as much longer thereafter as oil or gas is found in paying quantities." The five-year period expired in 1925, and, if the lease has been continued in force since that time, it is by reason of the provision "as much longer thereafter as oil or gas is found in paying quantities." That provision is a familiar one in oil and gas leases and is usually construed to mean not only that oil or gas must be discovered but that one or the other must be actually produced in paying quantities, otherwise, the lease expires by its own limitations. Murdock-West Co. v. Logan, 69 Ohio St. 514, 69 N. E. 984; Detlor et al. v. Holland, 57 Ohio St. 492, N. E. 690; Gas Co. v. Tiffin, 59 Ohio St. 420, 54 N. E. 77; Cassel v. Crothers, 193 Pa. 359, 44 Atl. 446; Anthis v. Sullivan Oil & Gas Co. (Okla.) 203 Pac. 187; Collins v. Mt. Pleasant Oil & Gas Co. (Kans.) 118 Pac. 54; United States v. Brown, supra; Union Gas
 


 

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APRIL 19, 1934

& Oil Co. v. Adkins, 278 Fed. 854, 856. Where, however, gas alone is discovered under a lease providing, not for the payment of a percentage of the gross proceeds from sales of oil or gas, but a fixed sum as a periodic rental for each gas well, there is after" clause is complied with by the completion of a well capable of producing gas, even though the product is not marketed or utilized. See Roach v. Junction Oil & Gas Co., 72 Okl. 213, 179 Pac. 934; Summerville v. Apollo Gas Co., 207 Pa. 334, 56 Atl. 876; Smith v. McGill,12 Fed. 2d 32. The lease involved in the case last cited was identical with that under consideration. Shortly prior to the expiration of the fixed period of the lease, the lessee completed a well with a daily production of 750,000 cubic feet. After marketing the gas for a few months, the gas ceased to flow through the pipe line because of lack of pressure. The lessee then drilled the well deeper and struck oil in paying quantities. During the period the lease was not producing,-a period of about three months-the lessee tendered payment of the fixed royalty of $300, but the lessor declined to accept the same and brought the suit to cancel the lease on the ground that the lease expired upon the cessation of production by its own terms. The court ruled that the finding of gas in paying quantities within the fixed period of the lease vested the lessee with a limited estate in the leased premises for further operations in accordance with the terms of the lease, and that such estate was not lost by a temporary suspension in marketing gas while the lessee was engaged in drilling the well deeper in an effort to find production in the lower sands. While such a temporary suspension of production was held not to effect a termination of the lease, the court recognized that the limited estate vested in the lessee by finding gas in paying quantities "might be lost by abandonment manifested by neglecting to produce oil or gas or to pursue the work of production or further development." See also Eastern Oil Company v. Coulehan, 65 W. Va. 531, 64 S. E. 836; Roach v. Junction Oil & Gas Co., supra; United States v. Brown, supra. In the latter case, it was held that the failure of a lessee under a lease like that under consideration to undertake development after disconnecting a gas well for a period of ten months was unreasonable and sufficient in itself to defeat a lease conditioned on oil or gas being found in paying quantities.

    Save for the year 1926 when some gas was sold from the well drilled by the Deep Rock Oil Corporation, that company has made no offer of payment of the prescribed royalty for a well producing gas in paying quantities. The payments of $100 were tendered under a provision in the lease relating to unprofitable wells and constitutes in effect an admission by the lessee that the well was not producing gas in paying quantities. For a period of nearly eight years, there has been no production whatever from the lease. No effort has been made by the lessee to market the gas nor has it spent a single dollar in further development work. The rule of temporary suspension announced in Smith v. McGill, supra, obviously has no application to such a case, and as it is an undisputed fact that production ceased at some time during the year 1926-27, it is my opinion, upon authority of the cases hereinbefore cited, that the lease then terminated by its own limitations.

    The holding over the lessee after termination of the lease can be regarded at the most as creating a tenancy at will (See Cassell v. Crothers, supra; Continental Oil and Refining Company, decided February 3, 1934, by the Circuit Court of Appeals, Tenth Circuit, but not yet reported). The holding over by the lessee having operated to deprive the lessors of the valuable privilege of leasing the lands to others, they are equitably entitled to retain the payments made by the lessee as a consideration for its continued occupation of the premises. Tenancies at will, under the laws of the State of Oklahoma (Sec. 7344 Compiled Okla. Stats. 1921) may be terminated upon thirty days' notice in writing. A proper regard for the interests of the Indian lessors suggests that such notice be given without further delay.

                                                                                                                                                    CHARLES FAHY,

Acting Solicitor.
Approved: April 19, 1934.
OSCAR L. CHAPMAN, Assistant Secretary.

PAPAGO-MINERAL RIGHTS

M-27656 (Supp.)                                                                                                                         May 7, 1934.

The Honorable,
The Secretary of the Interior.

DEAR MR. SECRETARY:

    The following question, propounded by the Commissioner of Indian Affairs, has been referred to me for opinion:

    "What effect, if any, has the mineral or non-mineral character of land within the Papago Indian Reservation upon the Indian right of surface occupancy?"

 

409

OPINIONS OF THE SOLICITOR

MAY 7, 1934

    Decision upon this question is essentially supplemental to a Solicitor's opinion, dated March 7, 1934 (M-27656), in which surface and mineral rights within the Papago Reservation were considered. In the last paragraph of that opinion appears the conclusion "that in 1853 the United States acquired title to the land in question subject to an Indian right to occupancy of an area not exactly determined". Earlier in the opinion it was pointed out that under Spanish and Mexican law mineral deposits constituted a tenement distinct from the surface which covered them. It was not intended to suggest in any way that the Indian right of surface occupancy is limited to "nonmineral" lands. Indeed, no formal classification of the land seems ever to have been made.

    When the United States acquired the Papago country as a part of the Gadsden Purchase, the area now included within the Papago Reservation was in the possession of the Papago Indians. The fact of immemorial Indian occupancy of this entire area is not disputed. The courts have consistently recognized such possession as vesting a legally protected possessory interest in the Indians. "The Indians' right of occupancy has always been held to be sacred; something not to be taken from him except by his consent." See Minnesota v. Hitchcock, 185 U. S. 373 (1902). No reason appears for denying such recognition with respect to Indian country acquired from Spain or Mexico. Cf. Chouteau v. Molony, 16 How. 203 (U. S. 1853). Nor does any basis appear for limitation of Indian right of surface occupancy to nonmineral lands when the factual immemorial possession upon which their right is based has continuously embraced the entire controverted area, quite irrespective of the mineral or nonmineral character of any tract.

    The Indian right of surface occupancy was confirmed by Executive Order of February 1, 1917. That order reserved "all surveyed and all unsurveyed lands" within the controverted area for the benefit of the Indians, excepting only the "minerals therein contained". A similar general reservation with the same limited exception of minerals appears in the Act of February 21, 1931 (46 Stat. 1202) 3 which extended the reservation to its present area. It must be clear, therefore, that the Indian right of occupancy within the exterior boundaries of the Papago Reservation is quite independent of the mineral or nonmineral character of any land.

    It  has been contended that a regulation of this Departments approved April 19, 1916 (45 L. D. 537), recognizes a restriction of Indian surface rights to those lands which are nonmineral in character. In fact, that regulation does no more than to declare that certain general mining regulations, with minor modifications, shall be applicable to mining operations within the reservation as permitted by Executive Order of January 14, 1916-an order superseded by the presently effective Executive Order of February 1, 1917. The regulation is in form a recommendation by the Commissioner of Indian Affairs, approved by the First Assistant Secretary of the Interior. In his recommendation the Commissioner remarked that "ample protection will be given the Indians in the occupation and use of their nonmineral lands".

    No such dictum in an administrative recommendation may be used as a basis for any inference that this Department has ruled or should now rule that Indian surface rights are restricted to non-mineral lands. The Indian right of surface occupancy extends over the entire reservation, and the Executive Order and statute which created the present reservation so declared. Any situation in which there exists the possibility of a progressive abridgment of those surface rights, without the consent of the Indians and without compensation to them, is anomalous and "paradoxical". See statement of Senator Wheeler in Vol. 17, Hearings Before Subcommittee of Committee on Indian Affairs of the United States Senate (1929-1932) at 8413, 8414.

                                                                                                                                              NATHAN R. MARGOLD

Solicitor.
Approved May 7, 1934.
OSCAR L. CHAPMAN, Assistant Solicitor
May 15, 1934.
INDIAN CORPORATIONS--FEDERAL CHARTERS

    It has long been recognized that the Federal Government has constitutional authority to create corporations for the administration of proper Federal Functions. Thus the United States has issued charters of incorporation to national banks (McCulloch v. Maryland, 4 Wheat. 316 1819); interstate bridge companies (Luxton v. North River Bridge Company, 153 U.S. 528); interstate railroads (Pacific Railroad Removal Cases, 115 U.X. 2); and patriotic societies (e.g. American Legion; see U.S. Code Title 36, Chapter 3).

    The constitutional authority of the United States to incorporate an Indian tribe, for the more convenient administration of Indian affairs, is beyond question. See Lane v. Pueblo of Santa Rosa, 249 U.S. 110, upholding corporate character of pueblo, under 10 Stat. 575, and Laws of New Mexico 1851-1852, pp. 176, 418; and see 14 C. J. 97: "Quasi-
 


 

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DEPARTMENT OF THE INTERIOR

MAY 15, 1934

municipal corporations have been created by Congress within State limits upon Indian reservations, and the power of Congress so to do is understand to stand unquestioned, (Citing authorities)."

    In the exercise of the congressional power to charter Federal corporations, there is no constitutional restriction upon the method of incorporation that Congress may select.

    A corporation may be created either by a special act, whereby a legislative body charters a corporation directly, or by a general act authorizing some administrative officer to issue a charter of incorporation to a body of "incorporators" under prescribed conditions. Both methods of incorporation are equally valid and constitutional. Falconer v. Campbell, 8 Fed. Cas. No. 4620 (1840); Cranby Min. Co. v. Richards, 95 Mo. 106; Ames v. Port Huron Co., 6 Mich. 266; 1 Blackstone comm. 474. The choice between these two methods of incorporation is a question of legislative policy.

    The Wheeler-Howard Bill is, in effect, a general incorporation law for a defined class of Federal corporations, to wit, incorporated Indian tribes or communities. The proposed bill (April Committee Print) specifies the procedure to be followed in the issuance of a charter (Title I, Section 2 and Section 15); enumerates the corporate powers which may be conveyed by charter (Title I, Section 4 and Section 15); specifies those corporate powers which every charter is to contain (Title I, Section 3); and otherwise defines the status and powers of a chartered Indian corporation, in many detailed provisions of the bill. The Wheeler-Howard Bill is, therefore, similar to the general incorporation bills enacted by Congress for certain classes of corporation in the District of Columbia (26 Stat. L. 625) and for national banks generally (U.S. Code, Title 12, chap. 2).

    In earlier times, all corporations were created by special legislation. This practice is still commonly followed by Congress. The Federal corporations thus chartered have been few in number and varied in character. In the various States, the difficulties and delays incident to the process of incorporation by special act led to the passage of general laws for the chartering of various types of corporation (e.g. stock corporations, charitable corporations, religious corporations, and other membership corporations). In many cases the States have gone so far as to prohibit, by constitutional provision, all special incorporation acts.

    It is noteworthy that Congress likewise prohibited territorial Legislatures from granting special legislative charters (Rev. Stat. Sec. 1889; Comp. Stat. (1913) Section 3478).

    It is also worthy of note that when a general law for the Federal incorporation of interstate carriers was recommended by President Taft (in a special message to Congress, dated January 10, 1910), the opponents of that measure, while objecting to many of its features, raised no objection to the general character of the law. Thus Mr. Garret of Tennessee declared on the Floor of the House (February 7, 1910):

    "In passing, let me say, Mr. Chairman, that if we are to have any such incorporation, I quite agree that it should be under a general law, and only under a general law. There should be no special acts of Congress granting charters to particular associations for special purposes. * * * I have frequently protested against the passage of special bills granting charters of incorporation to District associations, simply on the ground that we ought not to pass such special acts. I am glad to see that we have fewer of these than formerly. If we are to have this general policy, by all means let it be under a general law, but let us consider well before we have it at all."
    The policy of incorporation by special act was followed in various bills introduced in the last few years for the incorporation of particular Indian tribes (e.g. S-3588, 72d Cong.; S. 4165, 71st Cong.; H.R. 17052, 71st Cong.; S. 5753, 70th Cong.). These bills all failed of passage, apparently because Congress could not devote sufficient time to working out the administrative details of the "legislative charters". The present Wheeler-Howard Bill puts the responsibility for working out these details upon the Secretary of the Interior and the Indians seeking the charter.
Acting Solicitor.
MIGRATORY BIRD TREATY ACT

M-27690                                                                                                                                 June 15, 1934.

The Honorable,
The Secretary of the Interior.

MY DEAR MR. SECRETARY:

    You have requested my opinion as to whether the Migratory Bird Treaty Act of July 3, 1918 (40 Stat. 755), in applicable to the Indians of the Swinomish Indian Reservation in the State of Washington.

    On December 8, 1916, a treaty between the United States and Great Britain was proclaimed by the President (39 Stat. 1702). It recited that many species of birds in their annual migrations tra-
 


 

411

OPINIONS OF THE SOLICITOR

JUNE 15, 1934

versed certain parts of the United States and of Canada and that they were of great value as a source of food and in destroying insects injurious to vegetation, but were in danger of extermination through lack of adequate protection. The treaty therefore provided for specific close seasons and protection in other forms, and agreed that the two powers would take or propose to their lawmaking bodies the necessary measures for carrying out the treaty. The act of July 3, 1918, supra, entitled "An Act to give effect to the convention", prohibits the killing, capturing, or selling of any of the migratory birds included in the terms of the treaty except as permitted by regulations compatible with its terms to be made by the Secretary of Agriculture.

    The treaty and statute contain no provision excluding the Indians or Indian reservations from their operation. The treaty expressly mentions the Indians and makes concessions to them not extended to any other race. Article II, paragraph 1, dealing with close seasons, declares that the "Indians may take at any time scoters for food but not for sale". Paragraph 3 of the same article further declares:

    "The close season on other migratory non-game birds shall continue throughout the year, except that Eskimos and Indians may take at any season, auks, auklets, guillemots, murres and puffins, and their eggs, for food and their skins for clothing, but the birds and eggs so taken shall not be sold or offered for sale".
    These specific references to the Indians and the special concessions made them plainly show that it was the intention of the high contracting powers that the convention and the statute enacted for its enforcement should bind the Indians as well as others, irrespective of where the migratory birds might be found. That intention must be given effect, unless the Indians have been withdrawn from the operation of the treaty and statute by some other controlling law.

    It is urged that such other controlling law is found in the treaty under which the Swinomish Indian Reservation was created. That treaty, known as the Treaty of Point Elliott, was concluded on January 22, 1855, between the United States and the Dwamish, Suquamish, and other allied and subordinate tribes of Indians in Washington Territory. Article V of the treaty, relating to the fishing and hunting rights of the Indians, provides:

    "The right of taking fish at usual and accustomed grounds and stations is further secured to said Indians in common with all citizens of the Territory, and of erecting temporary houses for the purpose of curing, together with the privilege of hunting and gathering roots and berries on open and unclaimed lands: Provided, however, that they shall not take shell fish from any beds staked or cultivated by citizens."
    It is to be observed that the privilege of hunting given the Indians by the foregoing article does not extend to the reservation lands, but is confined to "open and unclaimed lands", that is, the undisposed of and unappropriated public lands of the United States. The right to hunt on the reservation lands was not specifically reserved to the Indians by the treaty. There was no necessity for making such a specific reservation with respect to the reservation lands. At the time the treaty was entered into in 1855, there was no impediment on the hunting rights of the Indians on the lands occupied by them. "The treaty was not a grant of rights to the Indians, but a grant of right from them-a reservation of those not granted." United States v. Winans (198 U.S. 371). The right of the Indians to hunt on the reservation lands thus continued not in virtue of any specific provision in the treaty but as a right already existing in them and not granted away by the treaty.

    The Migratory Bird Treaty Law, in so far as it restrains the Indians from taking and killing the class of game to which it applies, does not therefore conflict with the Indian treaty, and its validity, as applied to the Indians, depends upon the power of Congress to prescribe game laws restricting the Indians in their rights of hunting on the reservation lands. That Congress has such power appears to be beyond question. From the earliest traditions, the right of every individual to reduce wild game to possession has been subject to regulation and control by the lawmaking power. Geer v. Connecticut (161 U.S. 519). Primarily the State, both as trustee for the rights of all its people and in the exercise of its police power, has control over the right to reduce wild game to possession (United States v. Samples, 258 Fed. 479, 481). But this rule is without application to Indian reservations to which, according to repeated decisions of our Federal courts, the State's game and fish laws do not extend. In re Blackbird (109 Fed. 139); in re Lincoln (129 Fed. 247); United States v. Hamilton (233 Fed. 685). See also Peters v. Malin (111 Fed. 244), and State v. Campbell (53 Minn. 354; 55 N. W. 553). Congress has paramount authority over such reservations and the Indians occupying them (Lone Wolf v. Hitchcock, 187 U.S. 553, 565), and may, if it sees fit so to do, provide game
 


 

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DEPARTMENT OF THE INTERIOR

JUNE 15, 1934

laws to restrict the Indians in their natural and immortal rights of fishing and hunting. In re Blackbird supra. And even though such laws should conflict with the provisions of prior treaties with the Indians, there is respectable authority for upholding their validity. Thus in The Cherokee Tobacco Case (11 Wall. 616), it was held that a law of Congress imposing a tax on tobacco, if in conflict with a prior treaty with the Cherokees, was paramount to the treaty. And in Ward v. Race Horse (163 U.S. 504), the court ruled that the provision in treaty of February 24, 1869, with the Bannock Indians, whose reservation was within the limits of what is now the State of Wyoming, that "they shall have the right to hunt upon the unoccupied lands of the United States so long as game may be found thereon", was superseded by the provisions of the Enabling Act admitting Wyoming into the Union, and that the treaty provision did not give the Indians the right to exercise the hunting privilege within the limits of the State in violation of its laws.

    As hereinbefore pointed out, the treaty of December 8, 1916, is drawn in terms disclosing a clear intent on the part of the high contracting powers that the Indians as well as all other persons should be bound by the terms of the convention, and in the absence of any other legislation purporting to exempt them, it is my opinion that the Indians of the Swinomish Reservation are included within the prohibition of the treaty and the statute enacted for its enforcement.

                                                                                                                                        CHARLES FAHY,

Approved: June 15, 1934.
OSCAR L. CHAPMAN, Assistant Secretary.

REMOVAL OF REMAINS OF INDIANS

M-27750                                                                                                                          July 14, 1934.

The Honorable,
The Secretary of the Interior.

MY DEAR MR. SECRETARY:

    At the suggestion of the Commissioner of Indian Affairs, my opinion has been requested upon a question arising out of the following circumstances:

    Under the provisions of the act of February 28, 1919 (40 Stat. 1206) as amended by the act of May 4, 1932 (47 Stat. 146), two tracts of land within the Capitan Grande Indian Reservation in California have been sold to the city of San Diego for the construction of a dam and reservoir in aid of conservation and storage of water. On one of the tracts is located an Indian cemetery containing the remains of about sixty Indians. Notwithstanding the fact that the cemetery area will be inundated, the Indians occupying the reservation appear to object to removal of the bodies and desire that the graves remain undisturbed. Section 4 of the act of February 28, 1919, supra, reserves to the Indians of the Capitan Grande Reservation the right
to

"reside on, occupy, and cultivate the lands of their present reservation up until within ninety days of the time when water for storage purposes will be turned into the reservoir to be constructed hereunder."
The city of San Diego advises that the contract for construction of the reservoir dam requires its completion by October 31, 1934, and that water will be impounded in the reservoir immediately thereafter. The occupancy rights of the Indians will thus terminate about August 3 next, and the city demands that the bodies be removed and interred elsewhere before that date.

    The question thus presented is whether the Secretary of the Interior has authority to order the removal of the bodies without the assent of the interested Indians.

    It may be argued with some force that the acquisition of title by the city of San Diego divests the Federal Government of jurisdiction and that the city, as the owner of the soil, has succeeded to the position formerly occupied by the Federal Government as custodian of the bodies of the Indians buried in the cemetery. Under such view, the responsibility in the matter of the removal of the bodies would rest in the city of San Diego, and its authority in the premises would be governed and controlled by the laws of the State of California. It has been held, however, that a conveyance of land, without reservation of a family burying ground, neither confers any rights in the grantee to the bodies of the dead nor authorizes the grantee to remove the soil over them or to mutilate the graves. See 17 C. J. 1142 and cases there cited. Moreover, the right of the Indians to occupy the lands, notwithstanding the conveyance of title to the city, has not terminated and will not terminate until 90 days prior to the time water is turned into the reservoir. In the meantime, Federal jurisdiction necessarily continues with the right in the Secretary of the Interior to exercise all the powers which Congress has conferred upon him expressly or by necessary implication.

    It is established by the decision of the Supreme Court of the United States in Conley v. Ballinger
 


 

413

OPINIONS OF THE SOLICITOR

JULY 14, 1934

(216 U.S. 84) that lands within an Indian reservation set aside for use of the cemetery remain tribal property subject to the legislative authority of Congress; that legislation providing for the sale of the cemetery lands and removal of the bodies buried there is valid; and that no individual member of the tribe having relatives buried in the cemetery has any right to have the cemetery remain undisturbed by the United States. Under this decision, it is clear that if authority exists in the Secretary of the Interior to remove the remains of the Indians buried on the lands conveyed to the city of San Diego, such removal may be effected irrespective of the assent of the interested Indians.

    The acts of February 28, 1919, and May 4, 1932, supra, under which the lands here involved were conveyed to the city of San Diego, contain no express provision authorizing the Secretary to remove the bodies of the Indians interred in the cemetery. But a conveyance of the lands to the city for water storage purposes is so utterly inconsistent with the continued use of the lands as a cemetery as necessarily to imply that the remains of the Indians were intended to be removed. The authority to remove them must rest in someone and ic is in keeping with other legislation relating to the Indians that such authority be vested in the officer charged with the supervision of the Indians and their affairs. See West v. Hitchcock (205 U.S. 80, 84); Rainbow v. Young (161 Fed. 835). Indeed, the authority of the Secretary to remove the remains may be reasonably regarded as included within the broad grant of powers made to the Secretary by section 3 of the act of February 28, 1919, supra. Section 3 reads in part as follows:

"* * * That the Secretary of the Interior shall require from the city of San Diego in addition to the award of condemnation such further sum which, in his opinion, when added to said award, will be sufficient in the aggregate to provide for the purchase of additional lands for the Capitan Grande Band of Indians, the erection of suitable homes for the Indians on the lands so purchased, the erection of such schools, churches, and administrative buildings, the sinking of such wells and the construction of such roads and ditches, and providing water and water rights and for such other expenses as may be deemed necessary by the Secretary of the Interior to properly establish these Indians permanently on the lands purchased for them; and the Secretary of the Interior is hereby authorized to expend the proceeds or any part thereof, derived from this grant for the purposes above enumerated, for the exclusive use and benefit of said Indians:"
See also section 1 of the act of May 4, 1932.

    Removal of the Indians to and their permanent establishment on the lands to be purchased with the proceeds derived from sale of the reservation lands to the city of San Diego is the main object of the foregoing provision. In attaining that object the Secretary is not only authorized to expend the moneys for the specific purposes mentioned but for such other purposes as in his judgment of the Indians on the lands. A cemetery for burial of their dead, including the remains of those in the existing cemetery soon to be rendered unfit as a final resting place for the dead by a development in the public interest, appears to be such a real need that the expense of providing such a cemetery and the removal thereto of the remains of deceased Indians may be properly regarded as being within the general authority of the statute fairly construed. The authority existing, its exercise is not dependent upon assent of the Indians. Conley v. Ballinger, supra.

    In reaching this conclusion, I am mindful of the general policy of the law that the sanctity of the grave should be maintained and that a body once solemnly buried should remain undisturbed; also that the right to change the place of burial belongs primarily to the next of kin unless there is a surviving spouse, in which case he or she has the preference. But, as pointed out in Gray v. State (114 S. W. 635), these rights are not absolute and must and should yield when in conflict with the public good or where the demands of justice require subordination.

    The Commissioner of Indian Affairs advises that purchases of new lands for permanent homes for the Indians have not been completed. If, under such circumstances and in view of the exigencies of the situation, it is your judgment that the bodies should be removed, reinterment of the bodies, temporarily at least, in a suitable place on the diminished reservation, doubtless could be arranged; bearing in mind, of course, that the wishes of the interested Indians as to the final resting place of their dead should be ascertained and respected, if possible.

                                                                                                                                              NATHAN R. MARGOLD,

Solicitor.
Approved: July 14, 1934.
HAROLD L. ICKES, Secretary of the Interior.
 


 

414

DEPARTMENT OF THE INTERIOR

JULY 19, 1934

MINNESOTA--LIQUOR SALES

July 19, 1934.
Honorable Harold Knutson,
Saint Cloud, Minnesota.

MY DEAR MR. KNUTSON:

    I have received your letter of July 2 stating that it is your understanding that the act of June 11, 1934 (Public No. 301, 73d Congress), permits the sale of liquors, wines and beer in all portions of the so-called Indian territory in Minnesota, with the exception of the Red Lake Indian Reservation, and asking whether this interpretation is correct.

    By the treaties of September 30, 1855 (10 Stat. 1109) and February 22, 1855 (10 Stat. 1165), the Chippewa Indians ceded large tracts of land to the United States subject to the provision contained in article 7 of each treaty that the Indian liquor laws should continue in force throughout the ceded areas. The act of June 11, 1934 declares that the land so ceded by the two treaties shall cease to be considered as Indian country for the purposes of article 7, with two exceptions: First, the Indian liquor laws continue to apply "to the sale, gift, barter, exchange, etc., of liquors to ward Indians of the classes set forth in the act of January 30, 1897 (29 Stat. 506)"; and, second, the Indian liquor laws continue to apply "to the manufacture or sale of liquors on individual Indian allotments or other individual Indian-owned lands while the title to same is held in trust by the United States or while the same shall remain inalienably by the Indian without the consent of some governmental officer."

    As the act applies in terms only to the land ceded by the treaties of 1854 and 1855, your attention is called to the fact that both of the treaties reserve from the cession specific Indian reservations, such as Fond du Lac, Grand Portage or Pigeon River, Vermillion Lake, Bois Fort, Mille Lac, Rabbit Lake, Gull Lake, Pocagamon, Sandy Lake, Rice Lake, Leech Lake, Lake Winnibigoshish, and Cass Lake. None of these reservations were ceded by the treaties of 1854 and 1855; hence, it is my opinion that the lands within them are unaffected by the act of June 11, 1934. However, the Indian liquor laws will now apply only to those lands still remaining in tribal ownership or which may be embraced in individual allotments still held under trust or subject to restrictions against alienation. Lands, the Indian title to which has been completely extinguished, and over which the jurisdiction of the State for governmental purposes is full and complete would no longer be termed Indian country for the purpose of enforcing the Indian liquor laws.

    The White Earth Indian Reservation in Minnesota was created by the treaty of March 19, 1867 (16 Stat. 719), on lands which had been ceded to the United States by the treaty of February 22, 1855. This reservation, therefore, comes within the terms of the act of June 11, 1934 and, with the exceptions noted above, the Indian liquor laws no longer apply.

    The Red Lake Indian Reservation is not within the areas ceded by the treaties of 1854 and 1855, and the act of June 11, 1934 is without application to that reservation. None of the lands within the reservation have been allotted and the Indian liquor laws continue in full force and effect thereover.

Solicitor.
FORT TOTTEN--STATE SCHOOL TAX
July 20, 1934.
Memorandum for the Commissioner of
Indian Affairs

    The second paragraph of the attached letter to the Superintendent of the Fort Totten Indian Agency does not appear to be sufficiently responsive to the question of whether the Indians under his jurisdiction are subject to the State per capita school tax. I suggest that the paragraph be revised to read as follows:

    "The statute quoted in Mr. Gilbertson's letter subjects residents of the State of North Dakota twenty-one years of age or over to a per capita school tax (Session Laws of 1931, Chapter 247, page 423). Section 6 of the act of May 8, 1906 (34 Stat. 182), expressly declares that until the issuance of fee simple patents all allottees holding trust patents shall be subject to the exclusive jurisdiction of the United States. As exclusive jurisdiction of necessity means the exclusive right to legislate (Surplus Trading Co. v. Cook, 281 U.S. 647, 652), the State of North Dakota is clearly without authority to tax those Indians who have not received fee simple patents. Section 6 of the act of 1906 further declares, however, that Indians to whom fee simple patents have issued shall have the benefit of and become subject to the laws, both civil and criminal, of the State or territory in which they may reside. The Indians in your jurisdiction to whom fee simple patents have issued have, therefore, been subjugated to the general laws of the State of North Dakota,

 

415

OPINIONS OF THE SOLICITOR

JULY 26, 1934

including, of course, the law imposing a per capita school tax upon the residents of that State."

                                                                                                                                            NATHAN R. MARGOLD,
Solicitor.
SNAKE-ATTORNEY'S CONTRACT
July 25, 1934.
Memorandum for Mr. Zimmerman:

    You have asked my advise as to whether the attached contract by which the Snake or Paiute Indians of Burns, Oregon, employ Father Peter Huel to represent them in the matter of formulating and presenting their claims against the United States, should be approved.

    The contract provides for payment of compensation to Father Huel of not to exceed 10 per cent of the amount recovered, plus necessary actual expenses to be paid from the recovery. The contract further provides for the employment by Father Huel of such assistants, including attorneys, as he may select, the compensation of such assistants and attorneys to be paid by him and not the Indians. Under this provision it appears that neither the Indians nor the Department would have anything to do with the selection of the attorneys employed.

    The contract is executed by two delegates selected by a council called at Burns, Oregon, on the 2d day of February, 1933. Some affirmative showing that the two delegates were selected by a representative body of the Indians should be required. The present record continues no such affirmative showing.

    There is no legal objection to approval of the contract, provided it meets the requirements of Section 81, Title 25, United States Code. An examination of the contract discloses that two essential requirements of the statute have not been met.

    1. The contract has not been executed by Father Huel before a judge of a court of record.

    2. The period of the contract, as set forth therein, is five years from the date of approval of the Secretary of the Interior "and as much longer as may be necessary to complete the business provided for herein". The quoted phrase converts the period of the contract into an indefinite term and this is in violation of the provision in the statute that such a contract "shall have a fixed limited time to run which shall be distinctly stated."

    The contract is further defective from an administrative viewpoint in that it fails to contain the usual provisions subjecting conduct of the case to the supervision and direction of the Commissioner of Indian Affairs and the Secretary of the Interior and prohibiting compromise or other settlement without the Secretary's approval.

    It has been held by the Supreme Court that, as distinguished from lobbying in the odious sense, professional services before Congress and its committees, individual Representatives and Senators, intended to establish just and legitimate claims of the Indians and to secure such legislation by Congress as may be needed for attainment of the object sought, are legitimate and proper. See Winton v. Amos, (255 U.S. 373, 392, 393). Under the terms of the contract under consideration, such professional services are to be provided by Father Huel, himself not a lawyer, neither the Indians nor the Department having any voice in the selection of the persons to perform the services. Whether the needed services should be provided in this way or not presents, of course, a question of policy and not law. I am not sufficiently informed as to the facts or circumstances to venture a definite opinion upon the propriety of approving this particular contract-this is a matter for administrative determination. My general view is, however, that the better policy would be to confine approval to contracts with reputable attorneys qualified by experience and training to perform the highly specialized services required in the prosecution of
Indian tribal claims.

    If it should be your desire to approve the employment of Father Huel and retain control over the selection of attorneys, this could be accomplished, of course, by amending the contract to provide that the selection of attorneys shall be subject to the approval of the Commissioner and the Secretary.

Solicitor.
DEFAULT IN PAYMENTS UNDER TIMBER
CONTRACT-DETERMINATION OF
DIFFERENCE BETWEEN BREACHED AND
TERMINATED CONTRACT-KLAMATH

M-27728                                                                                                                                            July 26, 1934.

The Honorable,
The Secretary of the Interior.

MY DEAR MR. SECRETARY:

    You have requested my opinion as to whether the Crystal Creek Logging Company timber sale contract on the Crooked Creek unit, Klamath Indian Reservation, is eligible for modification under the act of March 4, 1933 (47 Stat. 1568), as amended.
 


 

416

DEPARTMENT OF THE INTERIOR

JULY 26, 1934

    The question of eligibility has been raised because a suit was prosecuted to judgment against the bonding company on the penal bond given by the purchaser, Mr. J. M. Bedford, doing business as the Crystal Creek Logging Company, to secure performance of the contract, an attempt being made to join Mr. Bedford as codefendant in the suit which was commenced after default on an apparent abandonment of the contract by the purchaser. Whether the contract is eligible for modification as a "now existing and uncompleted" one within the meaning of the statute in view of these facts is the question to be answered herein.

    The contract was made between the Superintendent of the Klamath Reservation, for and in behalf of the Klamath Tribe of Indians, and Mr. J. M. Bedford, doing business as the Crystal Creek Logging Company. The contract, together with a $10,000 penal bond with the Metropolitan Casualty Insurance Company of New York as surety, was approved by the Assistant Secretary of the Interior on October 20, 1926. The contract is for the purchase of 40 million feet of timber, five million to be cut before March 31, 1928, and five million each 12 months thereafter until the operation is completed. The timber is to be paid for on an increasing price scale, with a basic price of $8 per thousand feet of yellow pine timber. The contract also provides for advance payments on certain contracts for the purchase of timber on Indian allotments within the logging unit.

    Prior to June 30, 1928, only 1,742,450 feet of timber had been cut and no work has been done since then. By December 3, 1929, Mr. Bedford was in arrears $14,435.48 in advance payments on allotment contracts; and $35,936.80 are now due and delinquent on these contracts. On May 22, 1929, Mr. Bedford asked to have the contract canceled. On June 10, 1929, the Department of the Interior notified the surety company that the bond would be forfeited because of the defaults. However, on October 29, 1929, at the instance of Mr. Bedford, the Department gave its assent to a proposed assignment of the contract to one G. C. Grimmett. This assignment was not consummated.

    Suit on the bond was recommended by the Department on June 24, 1930, and the Department of Justice filed a complaint on or about December 2, 1930, naming Mr. Bedford and the surety company as defendants. The complaint demanded damages in the sum of $10,000 setting forth breaches of the contract and of the terms of the bond. Service of process was not made on Mr. Bedford, but judgment on the bond for the full amount of the penalty was obtained against the surety company on March 13, 1934. Whether this judgment has been appealed from is not shown in the file; but the United States District Attorney in charge of the case has expressed an opinion that one would be taken by the surety company.

    From Mr. Bedford's first default until December 24, 1931, the Klamath Reservation Superintendent continued to attempt collection of the amounts due on the contract. On the latter date he was advised not to attempt collection while the suit was pending.

    On May 2, 1934, Mr. Bedford submitted an application seeking to have his contract modified by the Secretary under authority given by the act of March 4, 1933. The statute provides in part:

    "That the Secretary of the Interior, with consent of the Indians involved, expressed through a regularly called General Council, and of the purchasers, is hereby authorized and directed to modify the terms of now existing and uncompleted contracts of sale of Indian tribal timber."
    The Klamath Tribal Council has expressed a desire to have the Bedford contract modified pursuant to the statute.

    Although the complaint filed in the suit named Mr. Bedford and the surety company as defendants and asked for damages for breaches of the terms of the contract and the bond, because Mr. Bedford was not served, judgment was entered only against the surety company and only for the breach of the terms of the bond. That this judgment did not terminate the contract between the Government and Mr. Bedford is clear, for the contract and bond are separate agreements. This judgment on the bond would not preclude an action for damages on the contract, at least insofar as such damages would exceed the recovery had on the bond; and if another action would lie on the contract it cannot be said to be terminated. Cramp and Co. v. Doughty (98 Atl. 260, New Jersey). No Federal cases appear to be directly on this point, but the reasonableness of the rule indicates that it would be followed. In this case, therefore, judgment on the bond against the surety company has no effect on the status of the contract as an existing one.

    The attempt to sue Mr. Bedford for damages likewise did not terminate the contract. Rather this was an affirmation of it, for a damage action must be predicated upon a contract. Wigent v. Marrs (90 N.W. 423); Williston on Contracts, Section 1301. Had there been a recision of the contract there could have been no recovery of damages. Heagney v. J. I. Case Co. (96 N.W. 197); McCormack Machinery Co. v. Brown (98 N.W. 697). If there is any recovery after a recision such
 


 

417

OPINIONS OF THE SOLICITOR

JULY 26, 1934

is not in the nature of damages, but is an attempt to put the parties in their original position. Williston on Contracts, Sections 1454 and 1455. Had the action against Mr. Bedford been carried to final judgment there would have been a merger of the contract in that judgment. Mason v. Eldred (6 Wall. 231); Hamer v. New York Railways Company (244 U.S. 272). In such event the contract would cease to exist. Here, however, because no service was made on Mr. Bedford, no such result could obtain.

  In determining whether the acts of the parties subsequent to default by Mr. Bedford terminated the contract, a distinction should be noted between existing, though breached, contracts and terminated contracts. A contract remains a contract even though a party has defaulted in performance thereof. Williston's treatise on contracts supports this conclusion, Williston on Contracts, Section 1302:

    "Neither where the plaintiff's excuse for his own nonperformance is the defendant's actual breach of the contract, nor where that excuse is a prospective breach because of repudiation does the plaintiff terminate the contract, merely by availing himself of his excuse. The contract still exists, but one party to it has a defence and an excuse for nonperformance."
    It is possible for the parties to rescind a contract by mutual agreement, or the injured party may elect to treat a total breach as a recision. However, the facts in this case show that a different position was taken by the Government. The Superintendent of the Klamath Reservation continued to attempt collection on the contract even after suit was commenced. Although Mr. Bedford sought to have the contract canceled, no cancellation was effected, and even after such request by Mr. Bedford the Government displayed a willingness to let Mr. Bedford assign the contract, indicating that the contract was considered as an existing one.

    In view of the foregoing, it is my opinion that the contract between the Government and Mr. Bedford, though broken, is now existing within the meaning of the act of March 4, 1933, as amended. It is, therefore, eligible for modification by the Secretary pursuant to statutory authority.

                                                                                                                                            NATHAN R. MARGOLD,

Solicitor.
Approved: July 26, 1934.
T. A. WALTERS, First Assistant Secretary.

ALGOMA LUMBER COMPANY

54 I.D. 546

M-27744                                                                                                                              Opinion, July 26, 1934

INDIAN TIMBER SALES-CONTRACTS WITH INDIAN-CONSTRUCTION.

    A contract must be viewed and interpreted with reference to the nature of the obligations between the parties and the intention which they have manifested in forming them, and, once ascertained, the intention of the parties must be given effect, sacrificing, if necessary, the literal meaning in order that the major purpose may not fail.


INDIAN TIMBER SALES-CONTRACT WITH LOGGING COMPANY-
CONSTRUCTION.

    A provision in a contract between an Indian tribe and a logging company required that before a reduction could be made in the stumpage price paid to the Indians it must be established that the logging "is being conducted" at a loss. Held, That by the use in the contract of the words "is being conducted" it was not intended that the means of proof should be limited to logging then and there actually being performed, but that it would be permissible to establish by other means that logging could not be conducted on the land at a profit unless a reduction was made in the price to be paid the Indians.
MARGOLD, Solicitor:

    The Algoma Lumber Company having made application to the Commissioner of Indian Affairs for a reduction in stumpage prices under its contract for the purchase of timber on the Antelope Valley Unit of the Klamath Indian Reservation, you have requested my opinion as to the authority of the Commissioner in the premises.

    The contract was approved by the Secretary of the Interior on September 13, 1923. It provides for basic prices of $3.75 per thousand feet of yellow pine, $1.50 per thousand feet of Douglas fir and incense cedar, and .75 per thousand feet of all other species of timber. The contract further provides for automatic increases in prices over successive three-year periods beginning April 1, 1928, and under this provision the prices for the period beginning April 1, 1934 are $5.457, $2.183 and $1.091 per thousand feet, respectively, on the species of timber mentioned above. The contract requires minimum annual cuts of timber, but under authority conferred by the contract the company has been relieved from such annual cutting requirements.

    It appears that the Algoma Lumber Company has heretofore sought price reductions under the
 


 

418

DEPARTMENT OF THE INTERIOR

JULY 26, 1934

act of March 4, 1933 (47 Stat. 1568), as amended, which act permits modifications of contracts by the Secretary of the Interior with the consent of the purchaser and the Indians involved. The Klamath Indian Council, however, refused to consent to a reduction in price below $4 per thousand feet for yellow pine. In my opinion of March 30, 1934 (see page 401), it was held that the act of March 4, 1933, did not preclude the Commissioner of Indian Affairs from granting price reductions pursuant to express contract provisions therefor. In conformity with that opinion the Algoma Lumber Company now petitions the Commissioner of Indian Affairs for relief under the following provisions of its contract:

    Upon presentation by the Purchaser of detailed information supported by affidavits by a certified public accountant and by the Purchaser, showing that the logging of the said unit is being conducted at a loss, investigation will be made by forest officers under the direction of the Commissioner of Indian Affairs, for the purpose of ascertaining whether, under existing market conditions, the Purchaser is able, with efficient management, to earn a reasonable profit on the operation. If such investigation shall show to the satisfaction of the Commissioner of Indian Affairs that the operation will not, under efficient management, earn a reasonable profit, he may, in his discretion, relieve the Purchaser from any portion or all of the increase in price over the original contract stumpage price for such period as he shall consider necessary to protect the Purchaser from serious loss on account of adverse market conditions: Provided, That none of the stumpage rates will ever be reduced below the prices specified in the contract for the period ending March 31, 1928; and the Commissioner shall have authority to reimpose any part or all of the increase in prices at any time upon giving notice to the Purchaser, subject to review by Secretary of the Interior.
    The foregoing provision is obviously designed to afford the purchaser relief from the automatic price increase during periods of economic depression when operations at such increased prices may not only deprive the purchaser of a reasonable margin of profit but may result in serious losses. To provide the needed relief, the Commissioner of Indian Affairs is given authority to scale down the prevailing contract prices to as low as the basic prices, if upon investigation by forest officers under his direction, it appears that operations on the unit cannot be conducted at a reasonable profit with efficient management at the contract prices. But the Commissioner's investigation is to be made upon the presentation by the purchaser of information showing that logging on the unit covered by the contract is being conducted at a loss, and herein lies the principal difficulty in the present case. No logging operations are being conducted on the Antelope Valley Unit, hence, the Algoma Lumber Company is unable to furnish the specific information required by the contract. In lieu thereof the company has submitted a balance sheet and an analysis of operations for the ten-months period ending December 31, 1933, on its private holdings adjoining the Antelope Valley Unit. The company claims that the private operations are on tracts sufficiently like the Antelope Valley Unit to be a fair indication of prospective costs on the Antelope Valley Unit. The sole question presented is whether the information so submitted by the Algoma Lumber Company may be accepted by the Commissioner of Indian Affairs as a basis for investigation and determination of the facts as to whether the company is entitled to relief.

    The literal language requiring presentation of information showing loss from logging the contract unit, standing alone, would deprive the Commissioner of authority to grant relief to the Algoma Lumber Company from excessive price increases however much the company might otherwise be entitled to such relief. But particular words may not be isolatedly considered. The whole contracts must be viewed and interpreted with reference to the nature of the obligations between the parties and the intention which they have manifested in forming them. United States v. Stage Co. (199 U.S. 414). As stated by Mr. Justice Bradley in Canal Co. v. Hill (15 Wall. 94, 99):

    We should look carefully to the substance of the original agreement * * * as contra-distinguished from its mere form, in order that we may give it a fair and just construction, and ascertain the substantial intent of the parties, which is the fundamental rule in the construction of all agreements.
    And once ascertained, the intention of the parties must be given effect, sacrificing if necessary the literal meaning in order that the major purpose may not fail. See Serralles' Succession v. Esbri (200 U.S. 103, 113); United States v. Stage Co., supra; Ozawa v. United States (260 U.S. 178, 194); United States v. Arzner (287U.S. 470).
 


 

419

OPINIONS OF THE SOLICITOR

AUGUST 3, 1934

    Viewing the contract provision under consideration as a whole, it is at once apparent that the major purpose of the parties was to confer upon the Commissioner of Indian Affairs authority to relieve the purchaser from losses occasioned by the conjunction of adverse market conditions and the automatic price increases. It is incredible that the parties have intended to make a showing of actual loss upon the particular contract unit a condition precedent to the granting of relief. So to hold would be to give controlling effect to inapt language of relative unimportance, with the result that the major purpose of extending relief to the purchaser from excessive price increases is defeated. This is not permissible under the authorities cited above. The condition precedent to the granting of relief is that the Commissioner of Indian Affairs shall find that the purchaser is not able, with efficient management, to earn a reasonable profit on the operation. This is to be determined, not from the preliminary showing made by the purchaser, but by the independent investigation to be made under the direction of the Commissioner. Extensions of time within which to operate having been made under express authority of the contract, the information presented by the purchaser as a basis for the Commissioner's investigation must, of necessity, be taken from sources other than operations on the contract unit. As it is possible for the Commissioner to ascertain with reasonable certainty the prospective costs of operations on the unit from such other comparable sources, no reason is seen why information of that nature may not be accepted as a basis for the Commissioner's investigation. The obvious purpose of the contract provision was to have before the Commissioner a prima facie showing that the purchaser is entitled to relief, and in the absence of operations on the contract unit, this purpose will be satisfied equally as well by the presentation of information from other comparable sources.

    Construing the contract provision under consideration as a whole and in the light of its obvious purpose, it is my opinion that the statements submitted by the Algoma Lumber Company of operations on its private holdings adjoining and comparable to the Antelope Valley Unit may be accepted by the Commissioner of Indian Affairs as a basis for investigation and determination of the facts as to whether the company is entitled to relief. The extent of the relief, if any, to be granted is, of course, a matter for administrative determination.

Approved: July 26, 1934.
T. A. WALTERS, First Assistant Secretary.

ALIENATION OF CHIPPEWA ALLOTTED LAND

54 I.D. 555
M-27700                                                                                                                                      August 3, 1934.

The Honorable,
The Secretary of the Interior.

DEAR MR. SECRETARY:

    You have requested my opinion as to whether a will executed by Shaday or Edwin Green as the sole heir of Joseph Green, Jr., a deceased Chippewa allottee of the Bad River Indian Reservation in Wisconsin, operated to remove the restrictions against alienation on 80 acres of land allotted to the deceased allottee and described as the N1/2 NW1/4 Sec. 27, T. 47, N., R 2 W.

    The allotment was made under the provisions of the treaty of September 30, 1854, between the United States and the Chippewa Indians of Lake Superior and the Mississippi (10 Stat. 1109). Article III of the treaty conferred authority upon the President of the United States to issue patents to the Indians for the lands allotted thereunder "with such restrictions of the power of alienation as he may see fit to impose." In pursuance of this authority a patent issued on June 20, 1889, conveying the above-described land to Joseph Green, Jr., and his heirs in fee, subject, however, to the restriction that the allottee and his heirs "shall not sell, lease, or in any manner alienate the said tract without the consent of the President of the United States."

    The allottee died February 4, 1893, intestate, leaving as his sole heir at law his father, Shaday, or Edwin Green, a Chippewa Indian of the Bad River Reservation. June 2, 1906, Shaday or Edwin Green executed a will by which he devised the land under consideration in equal shares to his grandson, Joseph E. Green, and his granddaughter, Agnes E. Green. The testator died April 8, 1909, and his will after admission to probate in the County Court of Ashland County, in 1918, was presented to and approved by the President of the United States on August 18, 1919. This will, according to a familiar rule, became effective on the date of the testator's death in 1909 and the subsequent approval of the President related back and took effect as of that date.

    By Section 2 of the act of June 25, 1910 (36 Stat. 855), as amended by the act of February 14, 1913 (37 Stat. 678, 679), Congress authorized any person over the age of 21 years having any right, title or interest in land held under a trust or other patent containing restrictions against alienation to dispose of the same by will. The act provides
 


 

420

DEPARTMENT OF THE INTERIOR

AUGUST 3, 1934

that no will so executed "shall be valid or have any force or effect unless and until it shall have been approved by the Secretary of the Interior" and declares that the "approval of the will and the death of the testator shall not operate to terminate the trust or restrictive period." October 29, 1921, the Solicitor for this Department held that this statute applied to wills executed by Chippewa Indians devising lands allotted in severalty under the provisions of the treaty of 1854, and ruled that such a will did not remove the restrictions against alienation imposed by that treaty (48 L. D. 472). From a reading of that opinion, however, it is apparent that the Solicitor was there dealing with wills executed by Indians who died subsequent to the enactment of the act of June 25, 1910, as amended, and not with wills of Indians who died testate at some prior date. To hold that the statute applies to this latter class of wills is to give the statute retroactive operation. Retroactive laws are not favored, and unless the intention that a statute is to have retroactive operation is clearly evidenced in the statute and its purposes, it will be presumed that it was enacted for the future and not for the past. White v. United States (191 U.S. 545); Cameron v. United States (231 U.S. 710). The act of June 25, 1910, as amended contains nothing express or implied indicating any intention on the part of Congress to embrace within its terms the will of an Indian who died prior to the enactment. To the contrary, the statute deals only with persons then alive or who might thereafter come into being, and confers upon them the authority to make a testamentary disposition of their restricted property subject to the conditions prescribed. This obviously excludes from the operation of the statute persons not then in being.

    As hereinbefore pointed out, the will of Shaday or Edwin Green became effective on the date of the testator's death in 1909. The effect of the will and the power to make it are governed and controlled by the law then in force. There was then no statute in existence expressly dealing with the making of wills by the Chippewa Indians, but it does not follow that there was a lack of testamentary power. While it has been held in certain cases that an Indian was without the power to dispose of his allotted lands by will in the absence of legislation by Congress permitting it, such cases are without application here because based upon statutes containing an absolute inhibition against alienation so that the allottee was unable, with or without approval of the President or the Secretary of the Interior, to make any disposition whatever of his lands. See United States v. Zane, 4 Ind. Ter. 185, 69 S. W. 842; In re: House's Heirs,132 Wis. 212; Taylor v. Parker, 235 U.S.42. The restrictions imposed under authority of the treaty of 1854 were not absolute. The inhibition extended only to such forms of alienation as failed to receive the approval of the President of the United States. Under the well settled rule that the word "alienation" includes the disposition of real estate by will (Hayes v. Barringer,168 Fed. 221, 224), it appears to be beyond question that the allottee or his heirs could make a valid testamentary disposition of the allotted lands with the approval of the President.

    Regarding the effect of the will as removing restrictions, it appears that the Commissioner of Indian Affairs by letter approved by the First Assistant Secretary of the Interior on October 5, 1933, advised the Superintendent of the Lac du Flambeau Agency that the approval of the will of Shaday or Edwin Green by the President of the United States did not operate to terminate the restrictions against alienation and that it was the purpose to recover possession of the land for the devisees through a suit to clear title, if such course should prove to be necessary. The Commissioner now states:

    "An attack upon the validity of conveyances made since approval of the will in this case involves changing an administrative ruling which has been in effect, it is believed, over a period of 30 years or more. During that period we have consistently held that disposal of an allotment by will is an alienation within the meaning or the provisions contained in the restricted fee patents issued to the Chippewa Indians under the treaty of 1854, and that approval of such wills by the President of the United States is effective to remove all restrictions against alienation of such lands in the hands of the devisees. * * *

    No record has been kept of the number of Chippewa allotments which have been alienated by wills approved by the President. It is safe to say, however, there are a large number of such wills and that in most cases the devisees have sold or encumbered their interests. These conveyances have not received the approval of the Department or of the President, for in the few cases in which the instruments of conveyance have been submitted for approval they have been returned to the parties unapproved with the explanation that the restrictions had been removed by approval of a will."

    Any possible doubt which might otherwise exist as to the soundness of the administrative view referred to by the Commissioner of Indian Affairs
 


 

421

OPINIONS OF THE SOLICITOR

AUGUST 6, 1934

appears to be removed by the decision of the Supreme Court of the United States in La Motte v. United States (254 U.S. 570). In that case the question of whether a will made under authority of Section 8 of the act of April 18, 1912 (37 Stat. 86), by a member of the Osage Tribe of Indians in Oklahoma devising his restricted allotted lands to incompetent members of the tribe, conveyed the title to them free from restrictions, was squarely presented and decided. There, as here, the authorizing statute was silent as to the effect of the will upon the restrictions. Holding that the restrictions were removed, the court said:

    "This provision is broadly written, is in terms applicable to restricted lands and funds, and enables the Indian to dispose of all or any part of his estate by will, in accordance with the state law, if his will be approved by the Secretary. True, it does not say that a disposal by an approved will shall put an end to existing restrictions, but that is an admissible, if not the necessary, conclusion from its words. After the enactment the Secretary of the Interior construed it as having that meaning, and it was administered accordingly in, that department up to the time of this suit. And that Congress intended it should have that meaning is at least inferable from a general act of the next session respecting wills by Indian allottees and their approval by the Secretary (c. 55, 37 Stat. 678); for that act, while providing that 'the approval of the will and the death of the testator shall not operate to terminate the trust or restrictive period,' expressly excepted the Osages from its reach. These matters apparently were not brought to the attention of the courts below. We regard them as of sufficient weight to put the question at rest."
    (See also United States v. Harris, 293 Fed. 389 and Yarhola v. Duling, 207 Pac. 293).

    Neither the will of Shaday or Edwin Green nor the presidential approval thereof contains any provision purporting to preserve the restrictions against alienation. In the absence of such provision and upon authority of the cases just cited, it is my opinion that the will conveyed title to the devisees free from all restrictions. The administrative ruling of October 5, 1933, is, therefore, in error and should be recalled and vacated.

                                                                                                                                              NATHAN R. MARGOLD,

Solicitor.

Approved: August 3, 1934.
T. A. WALTERS, First Assistant Secretary.

OSAGE-ATTORNEY'S FEE

M-27788                                                                                                                                August 6, 1934.

The Honorable,
The Secretary of the Interior.

MY DEAR MR. SECRETARY:

    July 7, 1933, the Department approved the employment of Leahy, Macdonald and Files, attorneys, for the purpose of defending Robert Smith, a restricted Osage Indian, in litigation before the Oklahoma State courts arising out of marital entanglements in which Smith had become involved. One suit, instituted by Juanita Wilson Smith, charges that Smith entered into a bigamous marriage with her, committed assault and battery, etc., and prays for recovery of damages in the amount of $65,000. The attorneys for Smith appear to have been successful in obtaining an annulment of the earlier marriage giving rise to the charge of bigamy and also filed a divorce action on behalf of Smith against Juanita Wilson Smith, alleging desertion. Stipulations for the settlement of the pending damage suit and the divorce suit have been entered into providing for the payment by Smith to Juanita of $2,750. In considering the propriety of approving the stipulations of settlement, the question has been raised, upon which my opinion is requested, as to whether the approval by the Department of the employment of attorneys to represent a restricted member of the Osage Tribe in litigation before a State court binds the Secretary of the Interior to the extent of requiring him to pay whatever judgment is ultimately entered therein.

    This question must be answered in the negative. No judgment of any court, State or Federal, in a suit between an Indian and a private party can have any binding effect upon the Government or its administrative officers. This is settled law with but one qualification. See Bowling and Miami Improvement Company v. United States (233 U.S. 528, 534); Sunderland v. United States (266 U.S. 226); Privett v. United States (256 U.S. 201); United States v. Candelaria (271 U.S. 432, 444). The one qualification, as pointed out in the Candelaria case, is that where the Government has employed and paid a special attorney to represent the Indians and look after their interests, the United States is bound as effectually as if it were a party by the judgment in a suit begun and prosecuted by the special attorney so employed and paid. In Logan v. United States (58 Fed. 2d. 697) it was sought to bring within the qualification a case wherein the Osage tribal attorney, employed
 


 

422

DEPARTMENT OF THE INTERIOR

AUGUST 6, 1934

and paid from Osage tribal funds, had appeared and represented individual Osage Indians. Holding that the United States was not bound by the judgment in such a proceeding, the Circuit Court of Appeals, Tenth Circuit, said:

    "To sustain the plea, appellant's counsel relies upon United States v. Candelaria, 271 U.S. 432, 46 S. Ct. 561, 70 L. Ed. 1023. The distinction, as we see it, between that case and this is that it appears therein that the attorney who represented prior litigation in a case of the same character and between the same parties in the state court was employed and paid by the United States, whereas in this case the superintendent and his attorney, in making the interplea in the probate court, were not paid as such officers by the United States; but annual appropriations have been made by Congress and were being made at that time, and it was provided that they should be paid out of the funds held by the Secretary of the Interior for the Osage Indians. The tribal attorney was selected by the tribe. They were not, therefore, the representatives of the United States in making the interplea. There is no showing that the Secretary of the Interior advised that the interplea be made. We, therefore, conclude that the United States, as plaintiff in this suit, was not bound by the action of the county court in denying the interplea."
    If appearance in litigation on behalf of an Indian by an attorney so intimately related to the Indians as a tribal attorney employed under contract approved by the Secretary of the Interior, does not make the judgment entered therein binding upon the United States, and the foregoing decision so holds, the appearance of a private attorney employed and paid by an individual Indian obviously cannot have such a binding effect. In virtue of the jurisdiction resting in the court over the parties thereto, the judgment entered in such a suit is, of course, binding upon them and may be enforced against any unrestricted property which the Indian judgment debtor may own free from Federal control or supervision. The restricted property of the judgment debtor, however, is exempt from levy and sale under such a judgment. Mullen v. Simmons (234 U.S. 192). In that case, an attempt was made to sell restricted land of a member of the Five Civilized Tribes in Oklahoma in execution of a judgment. The court held that this could not be done: that the policy of Congress in regard to restrictions upon alienation of allotments has been to protect the Indians against their own improvidence, whether shown by acts of commission or omission, contracts or torts; that these restrictions applied to a judgment entered against an allottee, whether based on a tort or on a contract; and that a tort may be a breach of a more legal duty or a consequence of negligent conduct, and a confessed judgment based on a prearranged tort might become an easy means of circumventing the policy of the statutes restricting alienation of Indian allotments if alienation could be effected by levy and sale under such a judgment.

    It does not follow, however, that the Secretary of the Interior is without authority to make payment of a judgment obtained against a restricted member of the Osage Tribe of Indians in a State court. Section 1 of the act of February 27, 1925 (45 Stat. 1008), authorizes the Secretary of the Interior to expend the restricted funds of members of the Osage Tribe for their benefit under such rules and regulations as he may prescribe. Section 6 of the act further authorizes the Secretary of the Interior to pay from such funds indebtedness incurred by reason of the unlawful acts of carelessness or negligence of such members. Under the broad authority so conferred, the Secretary may, if in his judgment it is to the benefit of the Indian so to do, pay such a judgment in its entirety or he may settle the claim by payment of such sum as he may deem proper. The authority of the Secretary is, of course, discretionary, and the extent of its exercise in any given case is a matter resting in his sound judgment.

    A further question upon which you asked my opinion relates to the "necessity or desirability of authorizing the employment of attorneys to represent Indians in damage suits brought against them in the State courts". While this a question for administrative determination, I may say that many reasons may be assigned for the necessity or desirability of authorizing such employment. Perhaps the most important of these is that in view of the congressional inhibition against the making of contracts of debt by Osage Indians of one-half or more Indian blood without the approval of the Secretary of the Interior (see section 6 of the act of February 27, 1925, 43 Stat. 1008, and section 5, act of March 2, 1929, 45 Stat. 1478), such Indians, in the absence of proper authorization, would be deprived of the right to employ counsel in defense of claims asserted against them in the courts. Unscrupulous persons would thus be encouraged to bring suits against the Indians in the hope, in some cases, of converting claims with little or no merit into enforceable judgments and, in others, of obtaining judgments by default for excessive or unconscionable amounts. A judgment is none the less conclusive because rendered by default United States ex rel. Harshman v. County Court (122 U.S. 306). Such judgment is just as conclusive an adjudication of whatever is essential to
 


 

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support the judgment as one rendered after answer and contest. Last Chance Mining Company v. Tyler Mining Company (157 U.S. 683). Such judgments would clearly be enforceable by levy and execution upon unrestricted property owned by the judgment debtor. Restricted property would, of course, be protected, but there is always the possibility that such protection may be withdrawn by the removal of restrictions or the enactment of legislation under which the payment of claims merged into judgment may be required from moneys in the hands of the Secretary of the Interior belonging to the judgment debtor. The hazards to which the Indians would be subjected suggest that the adoption of a general policy declining to authorize the employment of attorneys to represent members of the Osage Tribe, regardless of the circumstances presented, would be unwise unless the Government itself is in position to furnish trained counsel at its own expense to represent the Indians. In the absence of governmental counsel, the question of authorizing the employment of private counsel may well be left for determination in the light of the facts presented in each particular case.

                                                                                                                                             NATHAN R. MARGOLD,

Solicitor.

ROSEBUD SIOUX--CASH ALLOTMENT BENEFITS

August 8, 1934.

Memorandum for the Commissioner of Indian Affairs:

    Your letter of August 1, recommending that an application submitted by the heirs of Wounded Him Again, or Joseph Crow Eagle, deceased Rosebud Sioux allottee No. 2092, for cash allotment benefits, be approved, is returned herewith for further consideration.

    I agree with your conclusion that the application should be approved but not with the reasoning by which that conclusion is reached.

    Section 17 of the act of March 2, 1889 (25 Stat. 888-894), provided for the allowance to Sioux Indians of certain articles of personal property to each head of a family or single person over the age of 18 years "who shall have or may hereafter take his or her allotment of land in severalty", and the act of June 10, 1896 (29 Stat. 321-334), authorized the payment of cash to such Indians for the commuted value of the articles of personal property provided for in the prior act. Wounded Him Again, or Joseph Crow Eagle, was allotted August 21, 1900, under the act of 1889 and died September 10, 1910. As the head of a family with an approved allotment, he was entitled at the time of his death to receive cash benefits, and under the Comptroller's decision of May 11, 1915 (21 Comp. Dec. 806), his right to receive the same inured to the benefit of his heirs. The question presented is whether the right of the heirs is cut off by section 14 of the act of June 18, 1934 (Public No. 383), which reads:

    "The Secretary of the Interior is hereby directed to continue the allowance of the articles enumerated in section 17 of the Act of March 2, 1889 (23 Stat. L 894), or their commuted cash value under the Act of June 10, 1896 (29 Stat. L. 334), to all Sioux Indians who would be eligible, but for the provisions of this Act, to receive allotments of lands in severalty under section 19 of the Act of May 29, 1908 (25 Stat. L. 451), or under any prior act, and who have the prescribed status of the head of a family or single person over the age of eighteen years, and his approval shall be final and conclusive, claims therefor to be paid as formerly from the permanent appropriation made by said section 17 and carried on the books of the Treasury for this purpose. No person shall receive in his own right more than one allowance of the benefits, and application must be made and approved during the lifetime of the allottee or the right shall lapse. Such benefits shall continue to be paid upon such reservation until such time as the lands available therein for allotment at the time of the passage of this Act would have been exhausted by the award to each person receiving such benefits of an allotment of eighty acres of such land."
    The foregoing provision obviously has no application to Indians who have already received allotments in severalty under the laws in force prior to the enactment of June 18. The direction is that allowance of cash benefits be continued to all Sioux Indians who would be eligible.
"but for the provisions of this act to receive allotments of land in severalty under section 19 of the Act of May 29, 1908 (25 Stat. 451), or under any prior act".
    This plainly comprehends those Indians who were unallotted on the date of the enactment. Section 1 of the act prohibits the making of allotments to such Indians, and without allotments they could not qualify for cash benefits under the prior laws. The purpose of section 14 was to eliminate the allotment requirements as to this class of Indians so as to permit them to participate in the cash benefits as and when they reached the required status of single persons over the age of 18 years or
 


 

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heads of families. That the section is confined to such unallotted Indians is evidenced by the further direction that the allowance of benefits shall be continued

"until such time as the lands available * * * for allotment at the time of the passage of this act would have been exhausted by the award to each person receiving such benefits of an allotment of 80 acres of such land".
    The provision in section 14 that no person shall receive in his own right more than one allowance of benefits and that the right shall lapse unless an application is "made and approved during the lifetime of the allottee" appears to have reference only to the Indians admitted by that section to participation in the cash benefits, leaving unaffected the persons entitled to such benefits under the prior laws. Bearing in mind the plain purpose of the section to admit for participation Indians who would have been entitled to receive allotments but for the provisions of the act, it is evident that the word "allottee" was inaptly used to describe the person to whom the right to participate was extended though he be in fact unallotted. To hold otherwise would be to hold that Indians having allotments must make application and have it approved during their lifetime while the unallotted Indians, for whose benefit section 14 was enacted, would not be bound by such a limitation. Congress obviously did not intend such a result.

    In view of the foregoing, section 14 of the act of June 18, 1934, must be held to be without application in determining the right of the heirs of Wounded Him Again, or Joseph Crow Eagle, to receive the cash benefits due the decedent. Having received an allotment under the act of 1889 and having attained the requisite status to entitle him to receive cash benefits, under the Comptroller's decision of May 11, 1913, supra, descended to his heirs. The application of the heirs should, accordingly, be approved.

                                                                                                                                               NATHAN R. MARGOLD,

Solicitor.

CHIPPEWA ENROLLMENT

August 8, 1934.

Memorandum for the Commissioner of Indian Affairs:

    Your letter of July 23, addressed to Mrs. E. L. Beals, Bothell, Washington, regarding the application of her son Donald, for enrollment with the Red River Band of Chippewa Indians is returned without approval.

    The conclusion reached in the third paragraph of your letter that the applicant is not entitled to enrollment under the decision of the United States Circuit Court of Appeals in Oakes v. United States (172 Fed. 305), is correct. As a further reason for rejecting the application, however, the concluding paragraph of your letter urges that the act of June 18, 1934 (Public No. 383) excludes from tribal rights persons such as the applicant, who possess less than one half degree of Indian blood and who were born away from the reservation and the tribe. Section 19 of the act of June 18, 1934, defines the term "Indian" only for the purposes of the act, and for those purposes makes the term include, first, all persons of Indian descent who are members of any recognized Indian tribe now under Federal jurisdiction; second, all persons who are descendants of such members, who were on June 1, 1934, residing within the present boundaries of any Indian reservation; and third, all other persons of one half or more Indian blood. Under this definition, particularly the third division, persons of less than one half Indian blood, born away from the reservation and the tribe, would be excluded from consideration in carrying out the purposes provided for in the act. But the application of Donald Beals is for enrollment with the Red Lake Band of Chippewa Indians for the purpose of receiving a share in annuities distributable to the Chippewa Indians of Minnesota not under the act of June 18, 1934, but under section 7 of the act of January 14, 1889 (25 Stat. 642).

    The act of June 18, 1934, is without application, and the concluding paragraph of your letter should, therefore, be eliminated.

                                                                                                                                             NATHAN R. MARGOLD,

Solicitor.

SHAWNEE--AWARDS

August 8, 1934.

Mr. O. K. Chandler
P. O. Box 194,
Tulsa, Oklahoma.

MY DEAR MR. CHANDLER:

    I have received your letters of July 25, August 4 and August 5 regarding the payment of awards to Loyal Shawnee Indians or their heirs under the act of March 4, 1929 (45 Stat. 1550).
 


 

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    After carefully examining the provisions of the statute, it is my opinion that irrespective of whether the claimant is a restricted or unrestricted Indian, payment of the amount due may be made either to the claimant direct or be forwarded in care of his duly authorized attorney in fact. The question of which mode of payment should be followed presents, of course, an administrative question, subject to determination by the Commissioner of Indian Affairs. The Commissioner advises me that he has concluded to adopt the method of direct payment to the Indian claimant, with the qualification, however, that, before such payment is made, the duly authorized attorney or agent of any claimant will be given the privilege of applying for and receiving such reasonable compensation as the services rendered are found to merit. If you desire to avail yourself of this privilege, it is suggested that you file immediately with the Commissioner, in each case in which you claim compensation, itemized statements showing in detail the services you have rendered, together with powers of attorney or other evidence of your employment if you have not already done so. I have no hesitancy in making the assurance that you will receive fair treatment at the hands of the Commissioner.

    With respect to the statement contained in your letter of August 5 that you have learned that the Government is attempting to influence or cause certain of your clients to repudiate their contracts or agreements with you, I quote for your information the following statement made to me by Assistant Commissioner Zimmerman under date of August 7:

    "This is to advise you that no instructions or advise, oral or written, to the above named Indians, or any other Indians, have been issued by this Office suggesting that they ignore or repudiate contracts they may have entered into with O. K. Chandler, or any other person.

    From time to time letters have been written by this Office to various superintendents and Indians advising them that the services of an attorney or agent are not necessary to assist in the collection of sums due the Indians from the government and that the employment of attorneys or agents for such purpose only added an unnecessary expense to the Indian claimants. In such letters, however, the names of no attorneys or agents were mentioned, and as above stated, in no instance has any advice been given or suggestions made that contracts already entered into be repudiated."

Solicitor.

CREEK--STATE OIL PRODUCTION TAX

August 9, 1934.

Memorandum to the Commissioner of Indian Affairs:

    I am returning, without approval, your letter of July 24, recommending allowance of the claim of the Oklahoma Tax Commission for payment of $2,351 as gross production taxes assessed against a two-thirds royalty interest in oil produced from land allotted to John Lewis, deceased full-blood Creek Indian.

    John Lewis died intestate August 1, 1924, whereupon a two-thirds interest in his estate passed to Manna Lewis, widow, one-third; Lillie Lewis, one-sixth, and Eddie Lewis one-sixth. All three are full blood Indians and the interests inherited by them in the estate continued subject to restrictions against both alienation and taxation. The estate included the allotted lands of John Lewis, which were rich in oil production and designing persons immediately sought to acquire the interests of the heirs in this valuable property. In 1925 one, D. Replogle, with the approval of the County Court of Okfuskee County, Oklahoma, obtained conveyances from Manna, Lillie and Eddie Lewis for a consideration which was apparently grossly inadequate. Immediately thereafter he filed a suit in the District Court for Creek County to quiet his title. The Indian defendants filed a cross petition, praying for cancellation of the deeds. Judgment of the court was for the plaintiff Replogle, and an appeal was taken to the Supreme Court of Oklahoma. While the appeal was pending, a compromise was affected whereby Replogle was allowed to retain some $46,000 in royalties which he had collected during his claimed ownership, and the Indians received from him reconveyances of their respective interests in the lands by deeds containing restrictions against alienation.

    In these circumstances you hold that the original deeds from the Indians to Replogle freed the lands from all restrictions and subjected them to taxation, and that the reconveyances to the Indians did not operate to withdraw the lands from taxation. The cases of Shaw v. Oil Corporation (276 U.S. 575) and United States v. Brown (8 Fed. 2d 564), cited in support of this position, do not appear to be controlling. The question of taxation was not involved in United States v. Brown. Shaw v. Oil Corporation and other related cases merely stand for the proposition that the investment of restricted moneys belonging to individual Indians in privately owned taxable lands does not withdraw such lands from the taxing power of the State. In


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