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676

DEPARTMENT OF THE INTERIOR

SEPTEMBER 24, 1936

porated by reference, Senate Committee Report, supra, pp. 7, 8.)

    In the House, consideration was being given to a maintenance appropriation for Gila River Reservation, which as it then stood was not made reimbursable. Representative Mondell pointed out that part of the general irrigation appropriation seemed to be intended for the same purpose as this one; that the former was reimbursable and the latter was not. He moved to amend the item so as to make it reimbursable and the House agreed to it. The maintenance item for Fort Hall similarly had not been made reimbursable and an amendment making it reimbursable was later also moved and agreed to. (Cong. Rec., Vol. 51, pp. 3572, 3573, 3659.) In thus agreeing to the amendments, it evidently was assumed that this reimbursable proviso would not apply to projects for which specific appropriation was otherwise made in the act. United States v. St. Paul, 247 U.S. 310, 318; Fox v. Standard Oil, 294 U.S. 87, 96.

    The Fort Hall project then was not intended to be included within the terms of this proviso. In no sense is the latter repugnant to the 1907 exemption provision. Both are effective in different areas. There is no conflict and no implication of a repeal.

    (c) The next proviso is as follows:

    "That the Secretary of the Interior is hereby authorized and directed to apportion the cost of any irrigation project constructed for Indians and made reimbursable out of tribal funds of said Indians in accordance with the benefits received by each individual Indian so far as practicable from said irrigation project, said cost to be apportioned against such individual Indian under such rules, regulations, and conditions as the Secretary of the Interior may prescribe. * * * " (38 Stat. 583. This will hereafter be referred to as the apportionment proviso.)
    This proviso has no application to the Fort Hall project. The "cost" of that project was not "made reimbursable out of tribal funds." Its cost was intended to be reimbursed out of the moneys received from the sale of water rights to the white owners. (Act of March 1, 1907. See pp. 2 and 3 hereof.)

    Moreover, this proviso refers to reimbursement for cost of construction, not operation and maintenance. "Cost" of a project in the ordinary sense means the original cost, not that plus cost of maintenance. That this meaning was here intended is made plain by the surrounding context. The words "cost of any irrigation project" is used in contradistinction with "maintenance charges" in the maintenance proviso. Two separate provisos thus covered two differently characterized subjects and treated them differently. "Cost of any irrigation project" is followed by "constructed"; not constructed and maintained.

    The second half of the sentence, the first half of which constitutes the quoted proviso, also supports this interpretation. Being in the same sentence, separated by a comma and connected by "and", we may assume the general subject matter of both portions to be the same. The latter portion requires the Secretary to submit annually to Congress a "cost" account of each irrigation project. It enumerates what this report was to include. No mention is made of maintenance expenses. On the contrary, the only expenditures enumerated are: "amount expended on construction"; "amount necessary to complete"; and "cost per acre when completed." Thus, "cost" is related and limited to construction as distinguished from maintenance expenses.

    Abundant evidence that cost of construction, not operation and maintenance charges, was intended to be apportioned, may be found in the legislative records. (Senate Committee Report, supra, pp. 7, 8; Senate Committee Hearings, supra, pp. 277, 191, incorporated by reference in its report, pp. 7, 8; Cong. Rec., Vol. 51, p. 3660.)

    Even as to construction costs this proviso on its face assumes the existence of an obligation to reimburse. It merely provides for an equitable method of apportionment of "cost * * * made reimbursable out of tribal funds." There is no attempt, express or implied, to create an obligation to reimburse if none existed.

    The apportionment proviso and the 1907 exemption provision have no common subject matter. There can be no incompatibility. A repeal cannot be implied.

2.

    We come now to a consideration of the maintenance appropriation provisions for Fort Hall since 1914. Prior to 1914 they were made without provision for reimbursement. (36 Stat. 1063; 37 Stat. 524; 38 Stat. 87.)

    (a) In the 1914 act, the appropriation was provided to be "reimbursable to the United States out of any funds of the Indians occupying the Fort Hall Reservation now or hereafter available." (38 Stat. 589.) In effect, by the joint resolution of March 4, 1915, the same appropriation was made and it too was similarly made reimbursable. (38 Stat. 1228.) A similar provision was expressly included in the act of May 18, 1916. (39 Stat. 132.)

    These provisions did not effect an implied repeal of the 1907 exemption provision. In these three instances Congress merely provided for three
 


 

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exceptions to the application of the latter provision. To the extent thereby provided, there was inconsistency, and a resulting modification. But the older statute otherwise survived. (Wood v. United States, 41 U.S. 341, 362; Posadas v. National City Bank, 296 U.S. 497, 503, 504; Solicitor's Opinion, September 18, 1920, unpublished, D-48409.)

    (b) The act of March 2, 1917, however, provided:

    "For improvement and maintenance and operation of the Fort Hall irrigation system, $25,000: Provided, That expenditures hereunder for improvements shall be reimbursable to the United States in accordance with the provisions of the act of March first, nineteen hundred and seven." (39 Stat. 976.)
Except for the amount, the very same words are repeated in the acts of May 25, 1918 and .June 30, 1919 (40 Stat. 571, 41 Stat. 13).

    Here is convincing proof that Congress never intended to repeal the 1907 provision by the 1914 act. Operation and maintenance expenditures were not made reimbursable. Only improvement expenditures were. But this is immaterial. The quoted reference to the 1907 act is unmistakable evidence that three, four, and five years after the enactment of the 1914 act, Congress considered the provisions of the 1907 act concerning reimbursement of irrigation expenditures at Fort Hall to be still alive.

    In Rural Special School District v. City (218 S.W. 661, 142 Ark. 279) it was held that one statute did not impliedly repeal another. A statute enacted later than both had referred to the earlier of the two statutes as follows: "as provided in Act 321 of the Acts of 1909 * * * ." One ground for the decision was that there was no conflict between the two statutes. The other was that a "court should be slow indeed to construe an act repealed by implication which had been treated by subsequent legislation, touching the same subject matter, as a living, and not a dead, letter of the law." (218 S.W. 663.)

    (c) To five of the appropriations was merely added the word "reimbursable". (40 Stat. 840; 41 Stat. 1171; 42 Stat. 447, 1165; 43 Stat. 402.) The addition of the word "reimbursable" was neutral in effect. Reimbursement should then have been made according to existing law. Pursuant to the 1907 act, reimbursement of these appropriations should have been made by the Indian owners of lands leased for more than three years, and the white owners on the ceded tract.

    (d) Besides those already mentioned, there were nineteen Fort Hall maintenance appropriations.*

None of these made provision for reimbursement. They present no difficulties; they are consistent with and support the conclusion that the exemption provision was not impliedly repealed.

3.

    The construction of a statute which the Department charged with its administration has uniformly and consistently placed on it, is used by the courts as an aid in interpretation. (United States v. Healey, 160 U.S. 136, 145; Norwegian Nitrogen Co. v. United States, 288 U.S. 294, 315; 46 Harvard Law Review 1033.) Since 1914 the practice of the Department in assessing operation and maintenance charges at Fort Hall has not been uniform. Opinions on whether the 1907 exemption provision survived the 1914 act have been conflicting.

    Prior to 19 14, the assessments had been levied only against the white-owned lands on the ceded portion of the reservation. (Assessment orders of March 10, 1911, December 2, 1911, February 28, 1912, undated telegram from First Assistant Secretary to Dietz, fixing 1913 charges.) For the 1914, 1915, and 1916 irrigation seasons, the white owners were assessed. Though this is not quite clear the Indians were apparently merely debited the amount of the maintenance appropriations, which during these years were made reimbursable out of any available funds of the Indians. (Orders of September 11, 1914, February 26, 1915, March 21, 1916.) For the seasons from 1917 to 1925, inclusive, "each acre of land irrigable from the Fort Hall system," was assessed.* There was thus indicated an opinion that the 1914 act had rendered inoperative the injunction of the 1907 act against charging the Indians.

    In 1926 there was a change. The Assessment Order of the Secretary provided for assessment "against all lands in white ownership and on which fee patents shall have been issued to the Indian and where trust patent lands are leased." (Order of March 3, 1926.) This order was based upon a letter of the Commissioner of Indian Affairs to the Secretary dated February 26, 1926. In it he said: "The order fixing the charges for 1926 is similar to the order fixing such charges in 1925 except that specific mention is made relative to trust patent Indian lands in view of the provisions

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    * 38 Stat. 1157; 39 Stat. 31; 41 Stat. 408, 418; 42 Stat. 568, 1189, 1539; 43 Stat. 1152; 44 Stat. 464, 945, 1257; 45 Stat. 212, 1574; 46 Stat. 290, 1127; 47 Stat. 830; 48 Stat. 370; 49 Stat. 187; Act of June 22, 1936. Public No. 741.

    * Orders of February 21, 1917, February 4, 1918, February 21, 1919, February 9, 1920, February 4, 1921, March 10, 1922, February 27, 1923, March 20, 1924, March 28, 1925.
 


 

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of an act of March 1, 1907 * * *." A summary of the exemption provision followed. The 1907 act was still considered quite alive. This, though even this order did not fully comply with the 1907 provision. According to the statute, Indian owners, regardless of the nature of or restrictions on their title, were not to pay; the only exception was when their lands were leased for more than three years. This order assessed Indians if fee patents had been granted them, or if trust patent lands were leased, regardless of the term of the lease. The orders of January 27, 1927, February 7, 1928, and January 21, 1929, contained the very same language as that quoted from the 1926 order.

    On March 6, 1929, however, the Commissioner wrote the Secretary recommending a modification of the January 21, 1929, order. After quoting the exemption provision of the 1907 act, he said:

    "In view of the provisions of the law above cited, it is recommended that the order be modified so as to authorize the assessment of operation and maintenance charges for the season 1929 at the rate designated against 'all lands in white ownership and against lands in Indian ownership under lease for a longer term than three years.' "
The suggested modification would have resulted in complete compliance with the 1907 act and is in my opinion the form in which all operation and maintenance assessment orders should have been and now should be promulgated. Because of an opinion of the Solicitor, dated March 15, 1929, hereinafter more fully discussed, the recommendation was not accepted and the order not modified (M-18556.)

    In 1930 the assessment was levied "against all lands in white ownership, and against all lands in Indian ownership on which the restrictions have been removed, and against all restricted lands that are leased." (Order of February 10, 1930.) The same language has been used in all succeeding orders (March 5, 1931, December 29, 1931, January 6, 1933, February 28, 1934; the latter order is effective until further notice). Within the terms of these current orders there is not full compliance with the 1907 act. Indians are charged if their restrictions have been removed, or if they have leased their lands, regardless of the terms of the leases.

    Three unpublished opinions of the Solicitor similarly reflect vacillation and doubt. On December 13, 1916, it was held the assessments should be levied against all, white and Indian alike (D-40929). On September 18, 1920, the holding was that the 1907 provision had not been repealed, except as the act of 1914, joint resolution of 1915 and act of 1916 made the operation and maintenance appropriations provided by these statutes reimbursable (D-48409). On March 15, 1929, it was held that the 1914 act had completely repealed the 1907 provision (M-18556).

    The practice of the Department in administering and construing the 1907 and 1914 acts present no obstacle to a conclusion that the 1907 act is still in force. It has neither been uniform, consistent nor unchallenged. (United States v. Healey, 160 U.S. 136, 145; Norwegian Nitrogen Co. v. United States, 288 U.S. 294, 315; 46 Harvard Law Review 1033.)

    (a) In the 1916 opinion Solicitor Mahaffie held that the Indian lands should bear their proportionate share of the operation and maintenance charges. His only reason for so holding was that the three successive reimbursable appropriations of the 1914, 1915, and 1916 acts evidenced an intention that the Indians as well as the whites should pay the charges. That Congress never so intended is made abundantly clear by subsequent legislation. None of the Fort Hall appropriations made since 1916 was accompanied by any such provision for reimbursement of operation and maintenance charges. The three appropriation acts immediately following those on which Solicitor Mahaffie relied contain affirmative evidence that the 1907 provision was still considered by Congress to be alive; and nothing in later legislation supports a contrary conclusion.

    (b) The 1920 opinion of the Solicitor concerned both construction and operation and maintenance charges. Again, no consideration was given the three 1914 provisos. The opinion refers to the one of 1916, and to the four statutes enacted since that opinion, three of which provided for reimbursement "in accordance with the provisions of the act of March 1, 1907", and the fourth made no provision for reimbursement (acts of March 2, 1917, May 25, 1918, June 30, 1919, and February 14, 1920). It concludes: "The provision in the act of March 1, 1907, exempting lands in Indian ownership has not been abrogated by subsequent law, except as to expenditures made from the appropriations provided by the acts of August 1, 1914, joint resolution of March 4, 1915, and act of May 18, 1916." With this conclusion I am in complete accord.

    Even as regards construction charges the 1920 opinion did not mention the reimbursable proviso. It only gave consideration to the apportionment proviso. The assumption is implicit that the latter proviso concerned construction and not maintenance charges. Moreover, it was held that the Fort Hall project was "not within the purview of this provision. The cost is not made 'reimbursable out of tribal funds of the Indians." (p. 3.)
 


 

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    (c) The 1929 opinion held the 1907 provision was repealed by the 1914 act. Apparently the reimbursable and apportionment provisos were not considered material, for no mention was made of them. The maintenance proviso alone is discussed. I agree with so much of the opinion as held the power granted to the Secretary by that proviso was discretionary. For the reasons herein before fully set forth, I cannot agree there was a repeal.' His opinion relied on the language of the law, a portion of the report of the Senate Committee, and an opinion of the Attorney General. There is nothing in the language of the law from which the implication of a repeal would necessarily follow. The portion of the Senate Committee report which is referred to both in this opinion and that of the Attorney General had no application to the maintenance proviso or to maintenance charges. What was being discussed was the apportionment proviso, which concerned only construction charges and in any event did not apply to Fort Hall. (Senate Committee Report, supra,pp. 7, 8.)

    The Attorney General's opinion (33 Opinions, Attorney General, 25) concerned the liability of purchasers of Indian lands on the Wind River Reservation for payment of construction charges. It held there was no such liability because (a) the purchasers had bought in reliance on representations there would be no such charges, and (b) the 1914 apportionment proviso did not necessarily apply to white purchasers. Construction, not operation and maintenance charges were involved. The only portion of the 1914 act considered directly involved was the apportionment proviso. It was said: "A question arose as to whether the proviso in the act of 1914 directing the apportionment of costs was applicable at all to the Wind River Reservation, and the Solicitor for your Department gave an opinion that it does so apply." But in the 1920 Fort Hall opinion, the Solicitor said: "The Fort Hall project is not within the purview of this provision. The cost is not made 'reimbursable out of tribal funds of the Indians.' In this respect it differs from the Wind River project, subject of my opinion of May 25, 1920 * * *" There was no such statute as the Fort Hall exemption provision in the case of Wind River. No question of implied repeal was involved. The Attorney General's opinion furnishes no support, by analogy or otherwise, for a conclusion contrary to mine.

  Tothe extent that the Solicitor's opinion of March 15, 1929 is inconsistent with this opinion, it is overruled.

5.

    I think there can be no substantial doubt with regard to the conclusion that the 1907 exemption provision is still in force. But even if there were such doubt, it should be resolved in favor of the Indians. (Choate v. Trapp, 224 U.S. 665, 675.)

    In that case the question was whether allotted Indian lands could be taxed despite a provision in the statute under which patents had been issued that they were to be non-taxable during the period involved. It was held the exemption there considered was a constitutionally protected contract and property right of which the Indians could not be deprived without due process of law. The analogy between exemption from taxation and exemption from payment of maintenance charges is close. So that if we were to construe the 1914 act as an attempt to repeal the 1907 exemption provision, it might well be argued that the attempted repeal was beyond the power of Congress.

    But apart from this, the Choate case is authority for a rule of construction directly applicable to our problem. The argument had been made that tax exemptions are strictly construed. The Court applied another rule of construction, "recognized, without exception, for more than a hundred years" (224 U.S. 675):

"But in the Government's dealings with the Indians the rule is exactly the contrary. The construction, instead of being strict, is liberal; doubtful expressions, instead of being resolved in favor of the United States, are to be resolved in favor of a weak and defenseless people, who are wards of the nation, and dependent wholly upon its protection and good faith."
    In my opinion, the only Indian owned lands on the Fort Hall Reservation which may be assessed for operation and maintenance charges are those whose owners have leased them for more than three years. All other Indian owners have the right to receive water without payment of such charges.

                                                                                                                                            NATHAN R. MARGOLD,

Solicitor.
Approved: September 24, 1936.
OSCAR L. CHAPMAN, Assistant Secretary.

OSAGE--ADMINISTRATOR'S FEE

September 25, 1936.
Memorandum for the Commissioner of Indian Affairs:

    The attached letter dated May 29 from the Superintendent of the Osage Indian Agency on which you have endorsed a recommendation that
 


 

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certain fees be allowed to the joint administrators of the estate of Luther P. Mosier, deceased Osage Indian, and their attorney, is returned for further consideration.

    The fees which you recommend are less than the amounts allowed by the County Court of Osage County. The jurisdiction of this Department to review the action of the county court in matters of this kind depends upon whether the Department has jurisdiction and control over the funds from which the fees are to be paid. It appears from the order of the court that the administrators had in their hands some $1,100 from which amount the court directed that the fees of the administrators and their attorney be paid. Information at hand indicates that about one half of the sum in the hands of the administrator is clearly unrestricted and that the balance was derived from rents collected on certain restricted property located in the State of Missouri, which property was purchased for the decedent in his lifetime and conveyed to him by deed restricting alienation without the approval of the Secretary of the Interior. In view of the restrictions resting upon this property the Secretary rightfully could have insisted upon collection of these rents by the Superintendent of the Osage Indian Agency. But inasmuch as the decedent was of less than one half Indian blood it would have been the duty of the Secretary under section 4 of the act of March 2, 1929 (45 Stat. 1473, to deliver such funds to the administrators "to be administered upon according to the laws of the State of Oklahoma." Such funds thereupon would have been available for payment of expenses of the administration, etc., under order of the court. Congress has not seen fit to require that such orders be approved by the Secretary of the Interior.

    It is my opinion, therefore, that the county court in allowing the fees mentioned above acted within its jurisdiction and that the matter is not subject to review by the Department. In this connection your attention is called to the case of Hines v. Stein (298 U.S. 94), in which the Administrator of the Veterans' Bureau attempted to control the action of the local court in allowing a fee to the attorney for the guardian of a veteran, Holding that the action of the Administrator was unauthorized, the court said:

    "But we find nothing in any of these Acts of Congress which definitely undertakes to put limitation upon state courts in respect of guardians or to permit any executive officer, by rule or otherwise, to disregard and set at naught orders by courts to guardians appointed by them. Conflict in respect of such matters between state courts and the federal government, its officers or bureaus would be unseemly, perhaps extremely unfortunate. And in the absence of compelling language, we cannot conclude that there was intention to create a situation where this probably would occur."
    I recommend that the Superintendent of the Osage Indian Agency be advised that the action of the county court in fixing the fees to be allowed in this case is not subject to review by this Department.

                                                                                                                                            NATHAN R. MARGOLD,

Solicitor.
PATENTS--MINERAL RIGHTS

M-28614                                                                                                                             October 1, 1936.

The Honorable,
The Secretary of the Interior.

MY DEAR MR. SECRETARY:

    The Commissioner of the General Land Office has invited attention to five cases in which, through inadvertence, patents have been issued without mineral reservation required by applicable law and where six years have elapsed since the issuance of the patents, and he requests instructions as to what action should be taken in these and similar cases hereafter arising "for the purpose of establishing or maintaining the right of the Federal Government to the mineral deposits." This opinion on the subject is submitted for your consideration. The cases are: (1) a patent issued February, 4, 1919, on a desertland entry in a petroleum reserve in which the final certificate contained a mineral reservation under the act of July 17, 1914 (38 Stat. 509). and on which subsequently oil was discovered and produced; (2) a patent issued January 5, 1920, for an additional stock-raising entry under the act of December 29, 1916 (39 Stat. 862), under which all minerals are reserved; (3) a patent issued February 26, 1920, on a stock-raising entry, the final certificate containing the proper mineral reservation; (4) a patent issued May 26, 1923, on a desertland entry properly impressed with a mineral reservation under the act of July 17, 1914, by reason of an application for oil and gas permit for the land prior to perfection of the entry; (5) a fee patent without mineral reservation issued to an Indian on land within the Blackfeet Indian Reservation October 6, 1927, in substitution for a trust patent issued June 6, 1922, wherein was reserved all minerals for the benefit of
 


 

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OCTOBER 1, 1936

the Blackfeet Tribe of Indians, in accordance with the provisions of the act of June 30, 1919 (41 Stat. 17). In none of these cases does the patent, by reference to statute, in acreage, or in any other manner, contain anything upon its face to indicate that it could not legally be issued to convey both surface and all mineral deposits.

    In issuing a patent, the Executive branch of the Government acts not as a principal but as an agent, deriving its entire authority from acts of Congress. Shaw v. Kellogg, 170 U.S. 313. Under familiar principles of agency, a third party dealing with an agent may not rely upon acts which exceed the limits of the agent's authority, if he has actual or constructive notice of those limits. Tiffany on Agency, sec. 19. In dealing with a public agent, whose authority is necessarily prescribed and limited by the language of some statute, the private citizen is put upon notice of these limitations. This rule may cause hardships in particular cases where the relevant statutes are obscure, but, as was said in Whiteside v. United States, 93 U.S. 247, 257: "it is better that an individual should occasionally suffer from the mistakes of public officers or agents, than to adopt a rule which, through improper combinations or collusion, might be turned to the detriment of the public. * * * Individuals as well as courts must take notice of the extent of authority conferred by law upon persons acting in an official capacity, and the rule applies in such case that ignorance of the law furnishes no excuse for any mistake or wrongful act."

    Moreover, in each of the five cases here presented, the patentee and present owner of the land had actual notice that mineral rights .were reserved by act of Congress and did not pass with the surface rights. In case No. 1 express consent to this reservation was given by the patentee after the issuance of the final certificate but before the issuance of the patent. In case No. 4, the entryman filed in the district land office his express consent that his entry be made subject to the provisions and reservations of the act of July 17, 1914. In cases Nos. 2 and 3 the applications are made expressly "subject to the reservation to the United States of all coal and other minerals in the land." In case No 5, the trust patent issued prior to the final fee patent expressly reserved all mineral rights to the Blackfeet Tribe.

    Thus in each of the cases presented the patentee had actual notice that mineral rights were not to be conveyed with the surface of the land.

    A long line of decided cases maintains that patents issued in violation of law may be vacated or corrected through proper and timely legal proceedings.

  In Proctor v. Painter, 15 F. (2d) 974 the Circuit Court of Appeals for the Ninth Circuit declared:

    "The question whether a patent from the United States for public lands is valid or invalid is not always one of easy solution. The Supreme Court has repeatedly held that patents for lands which have been previously granted, reserved or appropriated are absolutely void. Morton v. Nebraska, 21 Wall. 660, 22 L. Ed. 639; St. Louis Smelting Co. v. Kemp,104 U.S. 636, 26 L. Ed. 875; Burfenning v. Chicago, St. Paul, etc., R. Co., 163 U.S. 321, 16 S. Ct. 1018, 41 L. Ed. 175; Salt Lake Inv. Co. v. Oregon Short Line, 246 U.S. 446, 38 S. Ct. 348, 62 L. Ed. 823. On the other hand, if the Land Department has jurisdiction to dispose of the land and to issue a patent therefor, an erroneous determination of the facts upon which the right to a patent depends, or an entire failure to determine such facts, will not avoid the patent. Burke v. Southern Pacific R. Co., 234 U.S. 669, 34 S. Ct. 907, 58 L. Ed. 1527.

    "Inasmuch as the authority or jurisdiction to issue patents for coal underlying public lands which have been withdrawn or classified as coal lands, or are valuable for coal, was entirely withdrawn from the Land Department by the act of 1910, supra, it would seem that this case is controlled by the former rule, because the land in question was known to be valuable for coal at the date of the issuance of the patent, if it was not then classified as such. It was so alleged in the complaint and it so appeared from the application for the patent itself. It would seem therefore that the patent was void in so far as it attempted to convey the underlying coal, unless the proper reservation is read into the patent."

    Accordingly, the Court held that the patent, though absolute on its face, did not divest the United States of its ownership of minerals in the patented area. This decision is in line with the general rule that legally unauthorized exceptions, conditions, or reservations in a patent are void. Burkev. Southern Pacific R. Co., 234 U.S. 669; Shaw v. Kellogg, 170 U.S. 313; Davis's Administration v. Weibbold, 139 U.S. 507; Francis v. Francis, 203 U.S. 303; Roberts v. Southern Pac. Co., 186 Fed. 934. The rule that deprives the Government of advantageous clauses erroneously inserted in a patent should work both ways. It would be unfair and unreasonable to hold that a legal error in a patent which inconveniences the individual patentee may be corrected or held null and void but that a legal error which is detrimental to the public is beyond human correction.

    The general rule is clear enough that the act of
 


 

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an executive officer in issuing a patent cannot convey an interest which the law reserves, that a patent absolute on its face is necessarily qualified by the limitations of the statute under which it issues, and that such limitations are, in effect, a part of the patent.

    As was said in the case of Swendig v. Washington Co., 265 U.S. 322, 332, in which the Supreme Court held that a patent absolute on its face was qualified by a departmental regulation continuing in force a revocable right of way previously granted to a third party:

    "The fact that the patents did not have thereon a notation of the prior permit is not controlling. * * * The issuing of the patents without a reservation did not convey what the law reserved. They are to be given effect according to the laws and regulations under which they were issued."
    To the same effect, see: Stoddard v. Chambers, 2 How. 284, 318; Chambers v. Atchison, T. & S. F. Ry., 255 Pac. 1092 (Ariz.).

    In United States v. Joyce, 240 Fed. 610, the patent made no reference to the act of July 4, 1884 (23 Stat. 76), under which application for the patent had been made. Nevertheless the Court held that the patent was subject to restraints upon alienation specified in that act.

    To the same effect, see: United States v. Hemmer, 195 Fed. 790, rev'd on other grounds, 204 Fed. 898, 241, U.S. 379; Felix v. Yaksum, 77 Wash. 519, 137 Pac. 1037; Taylor v. Brown, 5 Dak. 335.

    Applying the foregoing principles to the facts revealed in these cases I conclude that the United States is at liberty to assert title to the reserved minerals, through any appropriate legal or equitable action, unless such action is barred by an applicable statute of limitations.

    We come to consider, then, the effect of section 8 of the act of March 3, 1891 (26 Stat. 1099), which provides:

"* * * suits to vacate and annual patents hereafter issued shall only be brought within 6 years after the date of the issuance of such patents."
    In the first place, it is clear that this statute has no application to case 5, in which the reservation of mineral rights was for the benefit of the Blackfeet Tribe. It has been held that section 8 of the act of March 3, 1891, cannot be invoked to validate patents issued by the United States "in alleged violation of rights of its Indian wards and of its obligations to them." United States v. Minnesota, 270 U.S. 181, 196; and see cases therein cited.

    With respect to cases 1 to 4, a more serious question is presented. Clearly, in these four cases, a suit to vacate and annul the patents is now barred by the statute. It makes no difference whether the patent originally issued was "void" or "voidable". So far as the interest of the United States is concerned, any doubt that may be cast upon the validity of the patent is dispelled by the running for the period of limitations. United States v. Winona and St. Peter R.R. Co., 165 U.S. 463; United States v. Chandler-Dunbar Water Power Co., 209 U.S. 447; and see Louisiana v. Garfield, 211 U.S. 70, 77.

    Does this mean that the United States is without remedy in the premises and that the patentees have acquired a perfect title to minerals for which they never applied? I think not. The statute forbids "suits to vacate and annul patents." It does not forbid a suit to construe or reform the patent or to quiet title to mineral rights.

    A question essentially similar to that here presented was before the United States Supreme Court in Independence Coal and Coke Co. v. United States, 274 U.S. 640. Suit had been brought by the United States to impress a trust upon certain lands secured through fraud and to compel the reconveyance of these lands to the United States. The period of the statute of limitations had already run, and the statute was put forward as a defense to the action. The district court dismissed the bill as barred by the statute. This decision was reversed in the Court of Appeals for the Eighth Circuit, which disposed of the defense of limitation with the following comments:

    "In United States v. Winona & S. P. R. R. Co., 165 U.S. 463, 17 S. Ct. 368, 41 L. Ed. 789; Shaw v. Kellogg, 170 U.S. 312, 18 S. Ct. 632, 42 L. Ed. 1050, and other cases, it has been held that a certification of lands by the Secretary under statutory authority therefor has the same legal effect as a patent; and it is argued here that this suit was brought to avoid the certification. We think a mere reading of the bill demonstrates that view is a misconception. As to this suit, it is rather an acceptance of the Secretary's certification than an attack upon it. The Act of March 3, 1891, provides that suits to vacate and annul patents shall only be brought within six years after the date of the issuance of such patents. This suit was not brought to vacate and annul the Secretary's certificate. That is no part of its purpose. No such relief is sought. We think the

 

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statute relied on has no application to this case."

    The case was brought before the Supreme Court on certiorari and that court declared in its opinion, per Justice Stone (McReynolds, Sutherland and Butler, J J. dissenting):
    "The Statute of Limitations relied on provides that suits by the United States 'to vacate and annul any patent * * * shall only be brought within six years after the date of the issuance of such patents.' A point much argued here was whether a certification of public lands is a patent within the meaning of the statute. But that is a question which we need not decide. Statutes of limitation against the United States are to be narrowly construed. United States v. Whited & Wheless, 246 U.S. 552, 561. And we think it plain that the present suit, founded on equitable grounds, to compel a conveyance of title derived from a certification by the government is not a suit to cancel the certification. See United States v. New Orleans Pacific Ry., 248 U.S. 507, 510, 518."
    A somewhat similar case is United States v. Joyce, 240 Fed. 610. In that case, through clerical error, an ordinary patent was issued to an Indian, omitting the required declaration that the property should be held in trust for 25 years. In a suit brought by the United States against a third party to whom the land had been transferred during the unstated trust period, the defendant sought to maintain the validity of the patent actually issued, and pleaded the statute of limitations. Overruling this defense, the court declared:
"* * * the chief trouble is that the government does not seek to vacate or annul the patent, as shown by the prayer to this bill which we have set out. It does seek to have a decree that the defendant, now Nellie N. Coffey, has no estate or interest in the lands, and that it be decreed that the title of complainant is good and valid, save all rights acquired by the parties under the act of Congress of July 4, 1884, and that the defendant be enjoined from asserting any claim adverse to the complainant, and for general equitable relief.

    "True, the United States alleges in its bill that the patent is void and of no effect in so far as it exceeds the patent prescribed by the act of July 4, 1884; but there is no prayer that it be so decreed. It may be conceded that, if this were an action to cancel or annul the patent, the statute of limitations would apply; but it becomes more manifest that this is not an action to cancel or annul the patent when it is recalled that the heirs of John Wakemup, Sr., for aught that appears, are still the owners of an undivided two-thirds of the lands described other than lot 4, and none of them are made parties to this action at all. This cannot be considered as an action to annul and cancel the patent. It is an action rather to construe the patent in accordance with the law under which it was issued. In Pitan v. United States, 24 1 Fed. 364, - C.C.A. -, this court held that this statute did not bar the action to recover damages against a vendee who had obtained title to government land by fraud, and in like manner it does not bar an action to construe a patent and enforce it as construed."

    A similar distinction between a suit to annul and a suit to construe is taken in the case of Van Ness v. Rooney, 116 Pac. 392 (Cal.). In that case action was brought by a private individual claiming certain mining rights to quiet his title thereto as against a subsequent patentee. The court declared:
    "Plaintiff is not seeking in this action to annul or avoid a patent issued by the Government of the United States. The effect of granting the relief he asks does not in any way invalidate the patent in question. It is an interpretation of the instrument that will be brought about by the judgment in this action, which will determine what, if any, lands in section 29 of township 35 north of range 7 west, M.D.M., are included in the reserving clause of the patent." (at page 394).
    In United States v. Lee Wilson and Company, 214 Fed. 630, a bill was brought by the United States to quiet its title to certain lands. The question presented was a question as to the proper interpretation of a patent which, on its face, purported to convey a certain township, of a specified acreage, according to official plats of survey. Reference to such plats showed that certain portions of the township had not been surveyed. The Court held that the patent did not convey the unsurveyed land. Referring to the plea of the statute of limitations, the Court declared:
    "Complete answers to this plea are:

    "1. That this is not an action to vacate or
 


 

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annul a patent heretofore granted by the government. The claim of the government is based solely on the fact that these lands, being unsurveyed, were not and could not have been selected by the state, and no patent had ever issued for them. Therefore, it is claimed, the title thereto had never passed out of the government. United States v. Chandler-Dunbar Water Power Co., 209 U.S. 447, 28 Sup. Ct. 579, 52 L. Ed. 881, earnestly relied on by counsel for the defendant, is based upon a state of facts entirely different from those established in this case, and, therefore, inapplicable."

    In accordance with the foregoing authorities, I am of the opinion that the act of March 3, 1891, does not forbid either an action to reform the patents in question, or an action to secure a judicial construction of such patents, in the light of the statutes under which they were issued and the applications to which they are responsive, or an action to quiet title to mineral rights reserved to the United States under acts of Congress. Such action as may be required to correct the clerical errors in question does not deprive the patentees of the surface rights for which they applied and to which they were and are entitled. It does not vacate or annul their patents. It therefore does not fall within the letter or the spirit of the statute of limitations embodied in the act of March 3, 1891.

    In accordance with the foregoing opinion, the Commissioner of the General Land Office is authorized to call upon the patentee, in each case, to return the patent for correction, and should this request be refused, recommendations should be made to the Attorney General to institute appropriate legal proceedings.

                                                                                                                                            NATHAN R. MARGOLD,

Solicitor.
Approved: October 1, 1936.
T. A. WALTER, Acting Secretary of the Interior.

RESTRICTED LAND USE--LAKE
SUPERIOR CHIPPEWA


October 5, 1936.


 Memorandum for the Office of Indian Affairs:

    Several tracts of land are being purchased in Bayfield County, Wisconsin, in connection with the Indian Reorganization Act land program. Title to the lands is being taken in the name of the United States in trust for the Red Cliff Band of Lake Superior Chippewa Indians.

    In the course of examining title to certain parcels of land it has been disclosed that most of the land in Bayfield County has been restricted as to use by a zoning ordinance adopted pursuant to authority granted by an act of the State legislature Sec. 59.97 Wise. Stat. 1935. And the lands being acquired lie in restricted areas designated as forestry districts or recreational districts. Sections II and III of the zoning ordinance define permissible uses and specify certain prohibited uses. Notable among the prohibited uses are that family dwellings cannot be maintained in forestry districts and that farming is prohibited in both of the above mentioned districts.

    Without determining whether the restrictions will interfere with projected uses, you have suggested that the zoning ordinance by its terms is inapplicable to lands being acquired under the act of June 18, 1934 (48 Stat. 984). This, in my opinion, is correct.

    Section VIII of the zoning ordinance provides in part as follows:

    "The provisions of this act shall not apply to buildings, land or premises belonging to and occupied by the United States, the State of Wisconsin, any town or any School district."
This section is quite clearly prospective in effect applying not only to lands so stituated when the ordinance was adopted, but to other lands there after acquired by the United States.

    The requirement that the lands be owned and occupied by the United States appears also to be met by lands acquired by the United States in trust for Indian tribes. The Supreme Court has held that lands held in trust for Indians are in fact owned by the United States, and although occupied by Indians, remain instrumentalities of the United States. United States v. Rickert, 188 U.S. 432.

    I conclude that the lands in question fall within the exemption of the zoning ordinance above cited. It is unnecessary therefore to determine whether the same result would be reached in the absence of an express exemption in the ordinance.

                                                                                                                                            NATHAN R. MARGOLD,

Solicitor.
 


 

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EXPENDITURE OF TRIBAL FUNDS

October 5, 1936.
Memorandum for the Commissioner of Indian Affairs:

    After examining the points raised in your memorandum of September 10 concerning the expenditure of tribal funds, and the further arguments offered by you at our conference on October 2, I submit this statement of conclusions on which, I think, we are in agreement:

    1. Section 16 of the act of June 18, 1934, gives an organized tribe the right to prevent any disposition of its assets without the consent of the tribe. This includes the right to prevent disbursement of tribal funds by departmental officials where the tribe has not consented to such disbursement. The fact that such disbursement has been authorized by act of Congress, such act not expressly repealing relevant provisions of the Indian Reorganization Act does not nullify the power of the tribe to prevent such expenditure.

    2. Whether organized tribes are to be advised of their rights under the Indian Reorganization Act and of provisions in the current appropriation act which affect their tribal funds is an administrative question for the Indian Office to decide. (If it were my own place to decide this, any bill or act appropriating the funds of an organized tribe without its prior consent would be transmitted to the tribal authorities with full advice as to their legal power to prevent the disbursement of such appropriation.)

    3. An organized tribe, in seeking to prevent an expenditure of tribal funds, may act either by formal resolution properly transmitted to departmental officials or by the institution of court proceedings.

    4. Action of the tribe in forbidding the expenditure of appropriated tribal funds is necessarily prospective in character. The validity of disbursements already made cannot be impugned. Certain actions or projects of the Department are separable: others, inseparable. Whether a tribal resolution is effective to prevent a later disbursement, or whether the disbursement may be justified on the ground that action was undertaken before the resolution, must be determined with reference to the particular facts of any situation. Difficult cases may be referred to the Comptroller General.

    5. The fact that a tribe was not organized prior to consideration of a given appropriation act does not deprive it of power to prevent disbursements Of tribal funds authorized by such act, unless the constitution of the tribe expressly waives the right to object to disbursements already recommended to, or authorized by Congress.

    6. If a tribe has agreed to a given disposition of tribal funds recommended to Congress, whether or not the tribe was organized at the time, it is there after estopped from objecting to such disposition. Conversely, if the tribe has objected to a particular disposition of tribal funds prior to the Congressional appropriation, such objection continued in force and officials of the Department may not lawfully disburse the appropriated funds without positive authorization from the tribe.

    7. Hereafter any tribe organized at the time of considering an appropriation bill will be notified of its legal rights under section 16.

    8. Hereafter any tribe inquiring as to its rights under section 16 will be advised by your office, in accordance with the foregoing legal conclusions. In the event of protest from an organized tribe against any expenditure of tribal funds not previously authorized by the tribe, your office will either terminate such expenditure, negotiate an amicable settlement of the dispute with the Indian tribe concerned, or refer to this office of the Comptroller General any legal question that may be presented.

    Since the foregoing conclusions are in some respects at variance with the points made in your memorandum of September 10, I am appending the following comments on the points raised in that memorandum, which is herewith returned.

    Points numbered (a) (b) and (c) in your memorandum of September 10, appear to me to be without legal force. The argument assumes that the only time when expenditure of tribal funds may be vetoed by an organized tribe is "the time the appropriation bill was formed." This assumption is unjustified. In fact, it would be impossible to veto an expenditure at that time. Prior to action by Congress, the tribe can only advise. The veto power over expenditures of tribal funds which is granted to organized tribes by section 16 of the Reorganization Act and affirmed in approved constitutions issued under that act applies not to appropriations by Congress (which can be limited only by the Constitution of the United States) but to expenditures by Department officials (see for instance Article LV, section 1 (c) of the Constitution of the Cheyenne River Sioux Tribe approved December 27, 1935). The distinction between appropriations and expenditures is clearly established. 4 Corpus Juris 1460. If the tribe has the right to veto an expenditure at the time the expenditure is made, it is entirely immaterial that the tribe had no such right when the appropriation bill was drafted.

    In point (d) it is argued that the appropriation
 


 

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of tribal funds for certain purposes necessarily operated to repeal the provision in the act of June 18, 1934, granting an organized tribe the right to prevent any disposition of its assets to which it has not previously consented. This argument, unlike the preceding argument, does not depend upon whether the tribe was organized prior to the consideration of any particular appropriation act. If the argument is legally sound, then the chief contribution of the Reorganization Act to Indian self government in fiscal affairs has been wholly nullified. I do not think that the argument is legally sound. The appropriation act may be held to repeal the earlier statute only if there is in it express repealing language-which there is not-or if the later statute is necessarily inconsistent with the earlier statute. Here there is no inconsistency and both statutes may be obeyed. It is well settled that departmental expenditures must not only conform to the appropriation act authorizing them, but must conform as well to any existing permanent legislation which is not repealed by the appropriation act itself. See for instance 15 Comp. Gen. 43; ibid. 284. Section 16 of the act of June 18, 1934, is legislation of that character. Should an organized tribe, pursuant to the provisions of its constitution, disapprove any expenditure of tribal funds proposed by the Department, then the Department may either alter its proposed plan of disbursement within the general limits of the appropriation, so as to secure tribal consent or else, permit the appropriated funds to remain in the Treasury of the United States to the credit of the tribe. Since there is no necessary inconsistency between the statutes, the argument that the later statute over rides the earlier one, in my opinion, cannot be sustained.

    Points (e) and (f) deal in part with administrative questions upon which I express no opinion, and in part with legal consequences of the interpretation which this office has put on the two statutes. In the latter connection I may observe that suits of injunction will certainly not be brought if the Department adheres to the interpretation of the law above set forth and refuses to make disbursements of tribal funds over the protest of the duly authorized tribal authorities. The further argument that enforcement of section 16 of the Reorganization Act may lead to its repeal seems to me to be devoid of legal or logical force. The argument amounts to saying that if we continue to construe the language of section 16 as granting a veto power to organized tribes, Congress may decide to repeal this grant of power, but that if we abolish the power by statutory construction, Congress will not have to abolish it. My own view is that we should not abolish this veto power ourselves by a strained narrow construction of the act, and that we should urge Congress not to abolish this power. If, however, the power is to be abolished, I would rather the charge of bad faith were not leveled against this Department.

    Points (g) and (h) are unobjectionable although it should be noted that not all of the current and contemplated expenditures from tribal funds of organized tribes were submitted to the tribes prior to organization.

                                                                                                                                             NATHAN R. MARGOLD,

Solicitor.
NAVAJO--PROBATE
October 7, 1936.
Memorandum for the Commissioner of Indian Affairs:

    In connection with the work of the Probate Division in the Navajo jurisdiction certain factual questions have arisen that I am unable to answer and wish to submit to you for such consideration or expert investigation as you may deem proper. Briefly stated, these questions are:

    1. Are there any generally recognized tribal customs governing the descent of personal property among members of the Navajo Tribe or any definable subdivision of the tribe?

    2. If such customs exist, can they be formulated in rules of division among different classes of relatives or other rules which could be applied by our Examiners of Inheritance, or do such customs vest discretion over the disposition of property in certain relatives or tribal functionaries?

    3. If any such customs are now recognized, does the tribe desire to abolish them and substitute the laws of the various States within which Navajo Indians reside, or does the tribe desire to substitute new tribal ordinances governing descent of property?

    4. If no such customs are recognized, does the tribe desire to adopt State laws or independent tribal ordinances on the subject?

    In the attached file a negative answer to the first question is offered by the Examiner of Inheritance whose disregard of tribal customs in the Yellow Hair case had been criticized. To this statement are appended answers of certain individual Navajo Indians to questions presented by the Examiner of Inheritance. I am not satisfied that this evidence disposes of the questions above presented. The Examiner of Inheritance, in the first place, would naturally be influenced against any departure from
 


 

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the application of State law with which he is familiar. In the second place, there is no evidence that this particular employee has any training which would enable him to secure the information desired. The questions asked by him in the attached papers, evoking the answer that different cases are disposed of in different ways, are not such as to secure relevant information either from Indians or from non-Indians. In the third place, the competence of the Indians questioned is not known.

    In view of these considerations you may desire to have competent, trained investigators look into these questions more thoroughly.

    Since the foregoing questions have been raised by a single case (Estate of Yellow Hair, 75392, deceased Navajo Indian), which presents in concrete form various aspects of the general problem, there is here appended a summary of the proceedings had in that case.

    1. On December 26, 1933, Yellow Hair, an unallotted Navajo Indian, residing in that portion of the Navajo Reservation within the State of Arizona, died, without having made any formal will, leaving personal property, including, money, cattle, and agency accounts, which was valued altogether at $2,306.50.

    2. Promptly after the death of the decedent, the cash, cattle, and other personal property, except monies on deposit in the agency, were distributed. According to the report of the local stockman, the distribution was made in accordance with Navajo tribal custom, under the supervision of an Indian judge. According to the report of the stockman, tribal custom required that the personal property be distributed among clansmen of the decedent to the exclusion of three children aged between 42 and 44.

    3. On November 27, 1935, the Probate Division recommended that the property which had been distributed approximately two years earlier should be returned for distribution by the Examiner of Inheritance according to the laws of Arizona, and that agency accounts not yet distributed, in the amount of $387.50, should be distributed in a similar manner, on the ground that the distribution of property according to tribal custom had been illegal because not authorized by the Department, and that the descent of such property was subject to State law and to the jurisdiction of the Secretary of the Interior.

    4. In a memorandum of the Solicitor, approved by the Assistant Secretary on December 19, 1935, it was held that the recommendation of the Probate Division was unwarranted as a matter of law, that the distribution of property already made was lawful, and that the Department had no authority in the premises to determine heirs according to Arizona law. It was further recommended that the Examiner of Inheritance take testimony concerning Navajo customs of inheritance and submit a revised order determining heirs in accordance with such customs.

    5. The Probate Division thereupon submitted a revised order, withdrawing the recommendation that property already disposed of pursuant to tribal custom be redistributed in accordance with Arizona law, but repeated the recommendation that property which had not yet been disposed of should be distributed pursuant to Arizona law. This recommendation was defended on the ground that an investigation of tribal custom by the Probate Division would take a year or more and result in unnecessary delay in the disposition of this case.

    6. In a second memorandum of the Solicitor, approved by the First Assistant Secretary on March 18, 1936, the proposed order was again disapproved, on the same legal grounds that the original order was disapproved. In answer to the argument that the Probate Division could not readily undertake to study Navajo tribal customs, it was suggested that the matter might properly be referred to the Navajo Tribal Court authorized, under Chapter 3, section 5 of the Law and Order Regulations approved November 27, 1935, to pass upon such disposition of personal property as was involved in the Yellow Hair case.

    7. The Probate Division replied to the foregoing suggestion of the Solicitor, in a memorandum approved by Assistant Commissioner Zimmerman on May 8, stating that Indian courts were not yet sufficiently developed to handle cases of this sort, and requesting that the Examiner of Inheritance be permitted to handle the case.

    8. The Solicitor, in a memorandum dated May 15, acceded to the request of the Probate Division that the Examiner of Inheritance be permitted to handle the case, and further suggested that the Probate Division continue to handle similar cases until the Indian courts were able to assume this function. It was also suggested that proper instruction should be given to Indian judges by field officials with a view to transferring responsibilities in this field. Nothing was said in this memorandum concerning the law to be applied by the Examiner of Inheritance in handling this or similar cases. It was assumed by the Solicitor that this question had already been specifically dealt with in the memorandum of December 19, 1935, holding that State law had no application and that tribal custom or ordinance would govern. On the other hand, it was assumed by the Probate Division receiving this
 


 

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memorandum that the memorandum of December 19, had been overruled and that State law was to be applied in this and similar cases.

    9. On May 25 an order distributing the funds in question according to the laws of Arizona was approved by the Assistant Secretary. This order was presented by the Probate Division and passed by the Solicitor's Office, not having been brought to the personal attention of the Solicitor or those members of his staff who had collaborated in the earlier memorandum, under the mistaken impression that the Solicitor had approved distribution of the estate in accordance with Arizona law.

    10. On August 15 the approved order was modified on the ground that $236 of the total $387.50 ordered distributed did not actually belong to the estate, but belonged rather to the widow, having been received in payment for sheep that belonged to her and not to her husband.

    Whatever solution may be proposed for the difficulties of the present situation must lie within certain limits imposed by law. The applicable principles of law may be summarized as follows:

    1. Intestate succession to personal property of unallotted tribal Indians is not governed by State laws or by Federal laws, but by tribal custom or tribal ordinance.

    2. The descent of allotted lands, within the Navajo jurisdiction as elsewhere, is subject to the laws of descent of the State in which the land is situated, which laws are administered under the direction of the Secretary of the Interior.

    3. Wills of land or personal property formally executed by Navajo Indians may be and have been passed upon and approved by the Secretary of the Interior under authority of Federal law. Such jurisdiction is not legally exclusive, except as to allotted land and personal property held in trust by the United States. Oral or written wills not affecting allotted lands or trust property might be handled by tribal functionaries acting under tribal customs or ordinances.

    4. Cases involving a combination of the foregoing situations, such as estates including allotments together with personal property, have customarily been handled under the jurisdiction of the Secretary of the Interior. This practice has been dictated by convenience and common consent rather than strict legal authority. It is recognized and approved in section 13 of the Regulations Relating to the Determination of Heirs, approved May 31, 1935, and Chapter 3, section 5 of the Law and Order Regulations, approved November 27, 1935.

                                                                                                                                              NATHAN R. MARGOLD,

Solicitor.
CREDIT OPERATIONS UNDER THE OKLAHOMA
WELFARE ACT
October 14, 1936.
Memorandum for the Assistant Commissioner of Indian Affairs:

    The attached regulations and forms for credit operations under the Oklahoma Indian Welfare Act are returned herewith for further consideration of two legal difficulties that are raised by these regulations in their present form.

    In the first place section 2 of the proposed "Regulations for Loans from the United States to Individual Indians" purports to delegate to reservation superintendents the power to make loans to individual Indians. The power to make such loans is founded upon section 6 of the Oklahoma Indian Welfare Act, which provides:

"The Secretary is authorized to make loans to individual Indians and to associations or corporate groups organized pursuant to this Act."
The purported delegation of discretion to the local superintendents, while administratively justifiable no doubt, appears to be invalid in the light of past decisions of the Comptroller General. See 15 Op. Comp. Gen. 171, 14 Op. Comp. Gen. 601, 14 Op. Comp. Gen. 5. I recommend therefore either that the regulations should be modified to require Secretarial action on direct loans to individual Indians or that the question of the validity of the proposed delegation be specifically referred to the Comptroller General.

    A second and more difficult question is raised by the proposed creation of "Indian credit associations." Authority for the creation of such associations and for the lending of funds to such associations is not granted by any express language in the Oklahoma Act but must be derived, if at all, from the authority to charter cooperative associations conveyed by section 4 of that act. It is by no means clear that the proposed credit associations are in fact or in law cooperative associations. Indeed, the proposed "Regulations for Organization of Indian Cooperative Associations" indicate that a cooperative association organized for credit administration would differ in important respects from the proposed credit associations. For one thing, the officers and employees of the cooperative associations are responsible to the directors, and the directors are responsible only to the membership, while in the credit associations the directors may be removed from office "for cause" either by the members of the association or by the Commis-
 


 

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sioner of Indian Affairs (Bylaws of the ---------- Indian Credit Association, section 12), the principal officers hold office only at the pleasure of the Commissioner (Bylaws, section 17) and the employees of the association and the members of its advisory "loan committees" may be removed by the Commissioner (Bylaws, sections 14 and 17). Again, the management of the affairs of the cooperative associations is vested in the membership of the associations, while the affairs of credit associations are to be managed pursuant to instructions from the Indian Office (Bylaws, sections 13, 18, 41; "Regulations for Loans from Indian Credit Association to Individual Indians," section 10e). Likewise with reference to directors' meetings, the credit association bylaws (section 9) provide that the Commissioner or his representative may call such meetings and preside over them, while no such provisions obtain for cooperative associations. There are further distinctions between the two sets of regulations and forms, such as the fact that cooperative associations pay 3 percent interest on Federal loans, while credit associations pay only 1 percent, and the fact that credit associations must be stock corporations, while cooperatives need not be stock corporations. In general the line of distinction which these forms and regulations draw between the two types of organization appears to be that the proposed cooperatives vest legal power and economic responsibility in Indian groups, while the credit associations are primarily administrative agencies for the handling of individual loans, responsible to the Commissioner of Indian Affairs, and exercising advisory and clerical functions at his discretion.

    Prima facie the allocation of responsibilities in the proposed Indian credit association set-up does not fit the pattern of democratic membership control which recognized authorities on the cooperative movement stress as basic. Certainly it goes far beyond the legislative provisions included in some State cooperative laws permitting not more than one fifth of the directors of a cooperative to be selected by a public agency (Standard Cooperative Marketing Act, section 12; Kentucky Acts, 1922, chap. 1, sec. 12; Baldwin's Ky. Stat. 1928. section 883f; Hanna Cooperative Marketing Statutes (1931), 69 to 70 and statutes therein cited). I do not presume to speak with authority on the meaning of the term "cooperative" and it may be that the term is flexible enough to cover not only the associations designated in the proposed regulations as cooperatives but also those designated as credit associations. Without, however, making a further study of decisions and statutes defining the term "cooperative" I should not want to say that the proposed credit associations are cooperatives within the fair meaning of section 4 of the Oklahoma Act. I therefore suggest that you follow one of four courses in this matter.

1. Modify the proposed regulations and bylaws covering credit associations to make them conform to the general principles embodied in the regulations and forms for Indian cooperative associations.

2. Eliminate the regulations and forms covering credit associations entirely.

3. Refer to the Comptroller General the question of whether credit associations established in accordance with the proposed regulations would be considered cooperatives eligible to receive loans from the United States.

4. Separate the proposed regulations and forms affecting Indian credit associations from the remaining regulations and forms attached hereto so that more careful study, in the light of legal and other authorities on cooperative associations, may be given in this Office to the questions which these regulations present, without at the same time delaying action on other portions of the proposed credit regulations.

                                                                                                                                            NATHAN R. MARGOLD,
Solicitor.
LOWER BRULE SIOUX--REVOLVING
CREDIT FUND
October 16, 1936.
Memorandum for the Commissioner of Indian Affairs:

    The attached papers relating to a proposed loan from the Revolving Credit Fund to the Lower Brule Sioux Tribe are returned to you for further consideration.

    This loan agreement includes two assignments executed according to forms which were submitted to me for criticism several days ago and on which I have already transmitted my comments. In addition, however, to the defects pointed out in my memorandum, certain further difficulties in the use of this form for the present transaction must be noted. The two assignments appear to be in conflict with the fourth and fifth paragraphs of article 4 of the loan application. The fourth paragraph of that article asserts that the property included in the assignment is now in the possession of and owned by the tribe. This is not true as to any of the property covered by the proposed as-
 


 

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DEPARTMENT OF THE INTERIOR

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signments. The fifth paragraph warrants that the corporation has the right to sell, mortgage, assign, encumber, or convey the property described in the assignments. As pointed out in my earlier memorandum such property as is referred to in the assignments, not now being in existence, cannot be legally transferred by the tribe.

    Aside from the foregoing objections, which might be rectified by adding appropriate exceptions to the fourth and fifth paragraphs in article 4 of the loan agreement, the substance of the second assignment (income from land) and the procedure used in attaching this assignment to the main agreement would, in my judgment, subject the Department to serious criticism. This assignment on its face transfers to the United States all income that may be received from tribal land, for a period of 20 years. During the 20-year period of the assignment all funds received by the tribe as income from tribal land must apparently be used for expenditure under the terms of the loan agreement. This means that for a period of 20 years the tribe may not use its chief source of revenue for ordinary tribal expenses unless the loan agreement is modified. The tribal land, income from which is thus assigned, is now valued at more than $80,000 and this value is likely to be increased, whether through acquisition of submarginal lands, through further purchases under the Indian Reorganization Act, or through purchases or exchanges arranged by the tribe itself. In exchange for this general surrender of control over income from tribal land, the tribe receives a loan of $20,000 which is to be reloaned to certain members of the tribe, who will be required to furnish adequate security, such security in turn being transferred to the United States. The tribe as a whole, therefore, is pledging practically its entire income for twenty years to meet losses that may result from individual loans approved by Indian Service officials.

    It may be that the authorities of the tribe fully understand the nature of the proposed document. Even in that case I should doubt its propriety, for the Department is, after all, acting in a double capacity, as money lender and as guardian of the borrower, and in this double capacity should not, I think, ask for a kind of security which would not be countenanced if demanded by any other creditor. That, however, is a question that does not now arise. It clearly appears from the attached papers that the tribal authorities have not either signed or seen the proposed assignment forms. The covering letter makes no mention of the assignments. In view of the differences of opinion within the Department as to what some of the provisions of these assignments mean, it is, I think, extremely improbable that the tribal authorities asked to sign these forms will realize what they are signing. It is more likely that they will sign them as a matter of course and that they and their constituents will be unpleasantly surprised at some later time when someone explains to them what they have signed. I think it would be most unfortunate if the Department were to proceed further along the proposed course.

    A further defect in the proposed papers is the omission of a corporate seal from the agreements of the tribal corporation. It is important, I think, that the Department act to have this omission corrected not only in the instant case but in the case of other tribes which have received or expect to receive charters of incorporation.

    A further minor defect in the papers submitted appears in paragraph 3 of the Article IV of the loan application. This paragraph refers to certain mortgages in addition to the two agreements of assignment. No such mortgages are attached to the application.

    Finally, the loan agreement refers to exhibits "G" and "H" which appear to be irrelevant to this particular agreement and which are in any event not attached to the application.

    Certain typographical errors in the document submitted have been noted in the margins.

Solicitor.
ASSIGNMENT OF PROPERTY--FORMS
October 16, 1936.
Memorandum for the Commissioner of Indian Affairs:

    There are returned to you herewith for further consideration (1) two assignment forms submitted for my opinion and suggestions; and (2) attached papers relating to a proposed loan from the Revolving Credit Fund to the Lower Brule Sioux Tribe. Inasmuch as the proposed loan utilizes the two assignment forms, comments on these forms should be considered in connection with the approval of the loan.

1. Assignment Forms.

    Both of the proposed assignment forms purport to make a present assignment of income to accrue in the future from property or contracts not in existence at the time of the assignment.

    Such an assignment is generally held to be not valid except that between the parties themselves it may be enforced as a contract to assign property
 


 

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OPINIONS OF THE SOLICITOR

OCTOBER 16, 1936

when such property has been acquired. Thus if an incorporated tribe should, after executing an agreement in the form proposed, acquire notes, cash or chattels, and proceed to dispose of such property in an unauthorized manner to a third party, there would be no way of recovering such property from the third party, at least in the absence of actual or imputed fraud. Likewise such an attempted assignment of nonexistent property has been held invalid to protect the property, when acquired, from attachment at the hands of creditors. American Law Institute, Restatement, Contracts, section 154; Am. Jur. sections 13 to 15 and cases cited.

    In connection with the use of the proposed forms in South Dakota, attention is also called to section 520, Compiled Laws of South Dakota, 1929, which declares: "A mere possibility, not coupled with an interest, cannot be transferred." While State laws do not generally apply to an Indian tribe unless Congress has made them applicable, this statute might very well be applied to transfers of property between the tribe and private individuals made independently of the Federal Government. Similar statutes probably exist in many other States.

    In view of this state of the law, it is suggested that the present assignment be restricted in scope to property now actually in existence and to income due under existing notes or contracts. To this might be added an agreement to make specific assignments of after-acquired property in an amount fairly related to the amount of the loan secured.

    A minor ambiguity appears in the last sentence of each assignment form. The word "expenditure" as used therein may be construed to negative the use of collections for making repayments to the loan fund or other uses not generally classed as "expenditures". I suggest that there be substituted for the phrase "for expenditure under the terms of the afore-mentioned loan agreements" the following phrase: "in a manner not inconsistent with the afore-mentioned loan agreement or agreements."

2. Proposed Lower Brule Loan.

    The loan agreement submitted includes two assignments executed according to the forms above criticized. In addition, however, to the general defects of these forms above noted, certain further difficulties in the use of these forms for the present transaction appear. In the first place, the two assignments are in conflict with the fourth and fifth paragraphs of article 4 of the loan application. The fourth paragraph of that article asserts that the property included in the assignment is now in the possession of and owned by the tribe. This is not true as to any of the property covered by the proposed assignments. The fifth paragraph warrants that the corporation has the right to sell, mortgage, assign, encumber, or convey the property described in the assignments. As pointed out above, such property, referred to in the assignments, as is not now in existence, cannot be legally transferred by the tribe.

    Aside from the foregoing objections, which might be rectified by adding appropriate exceptions to the fourth and fifth paragraphs in article 4 of the loan agreement, the substance of the second assignment (income from land) and the procedure used in attaching this assignment to the main agreement would, in my judgment, subject the Department to serious criticism. This assignment on its face transfers to the United States all income that may be received from tribal land, for a period of 20 years. During the 20-year period of the assignment all funds received by the tribe as income from tribal land must apparently be used for expenditure under the terms of the loan agreement This means that for a period of 20 years the tribe may not use its chief source of revenue for ordinary tribal expenses unless the loan agreement is modified. The tribal land, income from which is thus assigned, is now valued at more than $80,000 and this value is likely to be increased, whether through acquisition of submarginal lands, through further purchases under the Indian Reorganization Act, or through purchases or exchanges arranged by the tribe itself. In exchange for this general surrender of control over income from tribal land, the tribe receives a loan of $20,000 which is to be released to certain members of the tribe, who will be required to furnish adequate security, such security in turn being transferred to the United States. The tribe as a whole, therefore, is pledging practically its entire income for twenty years to meet losses that may result from individual loans approved by Indian Service officials.

    It may be that the authorities of the tribe fully understand the nature of the proposed document. Even in that case I should doubt its propriety, for the Department is, after all, acting in a double capacity, as money lender and as guardian of the borrower, and in this double capacity should not, I think, ask for a kind of security which would not be countenanced if demanded by any other creditor. That, however, is a question that does not now arise. It clearly appears from the attached papers that the tribal authorities have not either signed or seen the proposed assignment forms. The covering letter makes no mention of the assignments. In view of the difficult legal questions involved in determining the meaning and effect of certain provisions in these assignments, it is, I
 


 

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DEPARTMENT OF THE INTERIOR

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think, extremely improbable that the tribal authorities asked to sign these forms will realize what they are signing. It is more likely that they will sign them as a matter of course and that they and their constituents will be unpleasantly surprised at some later time when someone explains to them what they have signed. I think it would be most unfortunate if the Department were to proceed further along the proposed course.

    A further defect in the proposed papers is the omission of a corporate seal from the agreements of the tribal corporation. It is important, I think, that the Department act to have this omission corrected not only in the instant case but in the case of other tribes which have received or expect to receive charters of incorporation.

    A further minor defect in the papers submitted appears in paragraph 3 of Article IV of the loan application. This paragraph refers to certain mortgages in addition to the two agreements of assignment. No such mortgages are attached to the application.

    Finally, the loan agreement refers to exhibits "G" and "R" which appear to be irrelevant to this particular agreement and which are in any event not attached to the application.

    Certain typographical errors in the document submitted have been noted in the margins.

Solicitor.
MENOMINEE--STATE WORKMEN'S
COMPENSATION ACT
October 20, 1936.
Memorandum for the Assistant Secretary:

    The attached letter addressed to the Industrial Commission of Wisconsin holds that the Workmen's Compensation Act of Wisconsin is applicable to the Menominee Indian Mills located on the Menominee Indian Reservation in that State. With this holding I am unable to agree.

    The Menominee Indian Reservation was created pursuant to the treaties of October 18, 1848 (9 Stat. 952), May 12, 1854 (10 Stat. 1064), and February 11, 1856 (11 Stat. 679). The mills were constructed, equipped and are being operated under authority of the act of March 28, 1908 (35 Stat. 51), and certain acts amendatory thereof. Section 1 of the act of 1908 authorizes and directs the Secretary of the Interior, under rules and regulations to be prescribed by him, to cause to be cut and manufactured into lumber the dead and down timber, and such fully matured and ripened green timber as the forestry service shall designate, on the reservation. Section 2 directs the Secretary to build, equip, and operate sawmills and authorizes the employment of skilled foresters, superintendents, foremen, cruisers, rangers, guards, loggers, scalers' and such other labor, both in the woods and for operating sawmills, equipment and necessary buildings as may be necessary in cutting and manufacturing logs and lumber and in the protection of the forests on the Indian reservation. The employment of other than Indian labor was prohibited, but this prohibition was relaxed by the act of January 27, 1925 (43 Stat. 793), to the extent of authorizing the making of contracts with white men for any work connection with the logging and milling operations on the reservation and also authorizing the employment of white men by Indian contractors. The act of 1908 further specifies the manner in which the timber products should be sold and directs that the proceeds therefrom shall be deposited at interest in the Treasury of the United States to the credit of the Menominee Tribe of Indians, the Secretary of the Interior being authorized to pay from the tribal funds, all necessary expenses of lumber operations, including erection and equipment of sawmills, etc.

    In none of this legislation is there any provision subjecting the operations of this lumber project to the jurisdiction of the State of Wisconsin, or authorizing the State to control or regulate in any way the operation of the mills. On the contrary, the acts of Congress are complete in their control and administration of the project. In such a situation the acts of Congress cannot be supplemented or supplanted by State legislation. Thus, in Blanset v. Cardin (256 U.S. 319) an act of Congress had given Indians the right to dispose of their restricted allotments by will in accordance with regulations prescribed by the Secretary of the Interior and subject to his approval. It was held that a will made by an Indian woman which was approved by the Secretary of the Interior, devising her restricted lands to others than her husband, was effective notwithstanding a provision in the Oklahoma Code that no married woman should bequeath more than two thirds of her property away from her husband. The court said, among other things:

    "The Secretary of the Interior made regulations which were proper to the exercise of the power conferred upon him and the execution of the act of Congress, and it would seem that no comment is necessary to show that (the provision of the Oklahoma Code) is excluded from pertinence or operation. * * * In a word, the act of Congress is complete in its
 

 

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OPINIONS OF THE SOLICITOR

OCTOBER 20, 1936

control and administration of the allotment and of all that is connected with or made necessary by it, and is antagonistic to any right or interest in the husband of an Indian woman in her allotment under the Oklahoma Code. * * *"

   To the same effect is Sperry Oil Co. v. Chisholm (264 U.S. 488). In that case the court upheld the validity of a lease made by an Indian on his family homestead in violation of an Oklahoma statute requiring that such lease be executed by both husband and wife. In so holding, the court, after approving the rule announced in Blanset v. Cardin, supra, said:
    "Nor is the validity of the extension lease affected by the provision in the Oklahoma constitution that nothing in the laws of the United States shall deprive any Indian or other allottee of the benefit of the homestead laws of the State. Whether or not this provision was intended to do more than to protect the allottees from the enforced seizure of their homesteads, it is sufficient to say that, whatever its purpose, it can have no more effect than the Oklahoma statute in giving validity to laws of the State repugnant to the reserved power of the United States in legislating in respect to the lands of Indians. Neither the constitution of a State nor any act of its legislature, whatever rights it may confer on Indians or withhold from them, can withdraw them from the operation of an act which Congress passes concerning them in the exercise of its paramount authority." * * *"
    In Surplus Trading Company v. Cook (281 U.S. 643) it was pointed out that Indians reservations, such as the Menominee, were part of the State in which they lie; that the laws of the State, both civil and criminal, have the same force and effect therein as elsewhere, save that they can have only restricted application to the Indian wards, and that private property within such reservations, if not belonging to such Indians, is subject to taxation under the laws of the State. Under this rule the Workmen's Compensation Law of the State of Wisconsin would doubtless apply to independent contractors at the Menominee Mills whether they employ Indian or non-Indian help. But the decision in the Cook case contains nothing to justify the conclusion that the State is authorized to impose legislation of this kind upon an Indian tribe residing within the limits of an Indian reservation set apart under formal treaty with the Federal Government. That the State may not do so, in the absence of Congressional legislation permitting it, is, I think, beyond contradiction. The decisions of our Federal courts and many State courts recognize that the Indian tribes, while maintaining their tribal relations and residing on Indian reservations set apart for them by or with the consent of the Federal Government, are wards of the Nation and not subject to State laws even when their reservations are located within the borders of the State. The cases so holding are reviewed at length in United States v. Hamilton (233 Fed. 686), in which the court held:
    "As the federal government has exclusive power over Indians living in tribal conditions on reservations within the borders of the state, the states cannot, though criminal code, section 328, is quite rudimentary, applying only to the most heinous offenses, extend their own laws to Indians on the theory that, Congress not having completely dealt with the subject, the states might deal with the matter, for, as Congress had exclusive authority, it must be assumed that, Congress intended to impose no other restrictions, on the ground of more primitive civilization of the Indians; therefore an Indian living in tribal conditions on a reservation in New York is not liable for a violation of the New York state Conservation Act (Laws 1911, c. 647, as amended by Laws 1913, c. 508) in fishing on the reservation with a net without the required license."
    And in State v. Rufus (237 N. W. 67) the Supreme Court of Wisconsin ruled that the State courts were without jurisdiction to entertain the prosecution of an Indian, having tribal relations and residing on a reservation, for an act which was an offense under the laws of Wisconsin. In that case the court overruled earlier cases which had upheld the jurisdiction of the state, and concluded:
    "We conclude, after a careful consideration of the decisions rendered since 1885, that State v. Doxtater, is completely out of harmony with the decisions of the courts, both state and federal, and that it should no longer continue as an authority which may be invoked in an attempt to justify prosecutions brought in the courts of this state against Indians who are still wards of the nation, for crimes committed on Indian reservations. While prosecutions brought in the state courts against Indians might have beneficial results, such is not sufficient to confer jurisdiction upon state courts

 

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DEPARTMENT OF THE INTERIOR

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in the absence of legislation by Congress authorizing such jurisdiction".

    Workmen's Compensation Laws, though enacted in the public interest and to meet a public demand, nevertheless impose burdens of considerable magnitude upon employers. The employer which would be subject to those burdens in the instant case, if not the United States, itself, is an Indian tribe under the exclusive jurisdiction of the United States. The principles stated and applied in the cases referred to above conclusively establish, I think, that such burdens may not be imposed by State legislation in the absence of an act of Congress authorizing the State so to do. As containing such authority my attention has been called to the act of June 25, 1936 (Public No. 814, 74th Congress), which reads:
    "That whatsoever constituted authority of each of the several States is charged with the enforcement of and requiring compliances with the State workmen's compensation laws of said States and with the enforcement of and requiring compliance with the orders, decisions, and awards of said constituted authority of said States hereafter shall have the power and authority to apply such laws to all lands and premises owned or held by the United States of America by deed or act of cession, by purchase or otherwise, which is within the exterior boundaries of any State, and to all projects, buildings, constructions, improvements, and property belonging to the United States of America, which is within the exterior boundaries of any State, in the same way and to, the same extent as if said premises were under the exclusive jurisdiction of the State within whose exterior boundaries such place may be.

    "Sec. 2. For the purposes set out in Section 1 of this Act the United States of America hereby vests in the several States within whose exterior boundaries such place may be, insofar as the enforcement of State workmen's compensation laws are affected, the right, power, and authority aforesaid: Provided, however, That by the passage of this Act the United States of America in nowise relinquishes its jurisdiction for any purpose over the property named, with the exception of extending to the several States within whose exterior boundaries such place may be only the powers above enumerated relating to the enforcement of their State workmen's compensation laws as herein designated: Provided further, That nothing in this Act shall be construed to modify or amend the United States Employee's Compensation Act as amended from time to time (Act of September 7, 1916, 39 Stat. 742, U.S.C., title 5 and supplement, sec. 751 et seq.) ."

    If the foregoing statute applies to Indian reservation lands, it is by reason of the generality of the terms used, for the statute makes no mention of Indian reservations or Indian lands. Aside from the fact that general legislation of this nature is not usually regarded as applying to the Indians unless so worded as clearly to manifest an intent to include them (Elk v. Wilkins, 112 U.S. 94, 100; McCandless v. United States, 25 F (2d) 71), the language of the statute is not such as may be readily extended to Indian lands. State authority, so far as the enforcement of workmen's compensation is concerned, is extended only to "lands and premises owned or held by the United States of America by deed or act of cession, by purchase or otherwise, which is within the exterior boundaries of any State, and to all projects, buildings, constructions, improvements, and property belonging to the United States of America, which is within the exterior boundaries of any State * * *". This language, given its ordinary meaning, seems to embrace lands and property owned absolutely by the United States to the exclusion of other lands such as Indian reservations, the full beneficial ownership of which is in the Indian tribes, the United States merely holding the legal title. Besides, the legislative history of the enactment discloses that its purpose was to furnish protection against death or disability to laborers and mechanics employed by contractors or other persons, not on Indian reservations, but on lands owned by the United States, particularly lands which the Government had acquired with the consent of the State so that Federal jurisdiction thereover was exclusive of all State authority. See Report No. 2294, Committee on Education and Labor, United States Senate, H. R. , 12599, 74th Congress, 1st session. Considered in the light of this purpose, the language of the act of June 25, 1936, cannot properly be regarded in my opinion as establishing State jurisdiction over an Indian tribe such as the Menominee Tribe.

    For these reasons I believe that a Wisconsin Statute on Workmen's compensation could not constitutionally be applied to the Menominee Tribe. It is proper to add that the State of Wisconsin does not appear to have asserted any such claim of jurisdiction. The present Wisconsin Workmen's Compensation Act is applicable to any "firm", "private corporation" or "public or quasi-public corporation" (Wisconsin Statutes, 1933, section 102.04, subsections 1, 2 and 3). The statute does not apply to Indian tribes as such. Neither
 


 

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OPINIONS OF THE SOLICITOR

OCTOBER 22, 1936

does it apply to cooperative or other voluntary nonprofit associations under which a tribe such as the Menominee Tribe might be subsumed.

    The United States Employees' Compensation Commission has recently held that employees of the Menominee Indian Mills are not entitled to the benefits of the Federal Employees' Compensation Act. For the reasons stated above it is my opinion that the compensation laws of the State of Wisconsin are also inapplicable. In this situation the matter is properly one for consideration by Congress, with a view to enacting remedial legislation extending either the Federal or State compensation laws to this project. If such legislation be sought, it is suggested that it should be in such form that the Compensation Commission, State or Federal, may take jurisdiction of and extend relief in proper cases of death or disability now pending.

                                                                                                                                             NATHAN R. MARGOLD,

Solicitor.
Approved: October 22, 1936.
T.A. WALTERS, Acting Secretary of the Interior.

RESETTLEMENT LOAN--UNORGANIZED
TRIBES

October 22, 1936.
Memorandum /or the Commissioner of Indian Affairs:

    Some time ago at a conference in my office you raised the problem of how tribes not organized under the Wheeler-Howard Act might deal with trial assets in a business-like way, particularly where resettlement or rehabilitation loans were available for productive development of tribal resources. I suggested at that time that perhaps the organization under State laws of a cooperative consisting of members of the tribe would afford a mechanism adequate for this purpose. Although You asked me at that time to elaborate the suggestion I have hesitated to do this in the absence of any concrete information. Let me, however, at this time offer as a basis for your further thinking on this matter a brief outline of how such a cooperative might function in relation to tribal property.

    1. Assume that a cooperative is organized, under State law, by a group of Indians who are members of an unorganized tribe.

    2. The tribe might then proceed to lease timber, grazing lands, minerals, or other assets to the cooperative at a nominal rental. This would be proper only if the cooperative were legally open to all members of the tribe and if a substantial majority of the tribe were actually members of the cooperative. In order to permit participation by substantially all members of the tribe in the activities of the cooperative it would have to combine productive activities with handling of retail trade or other services in which all members of the tribe might be interested.

    3. Such resources might be developed for productive purposes by the cooperative. At the same time it would be possible to sublease part of such resources to the usual class of lessees in order to raise funds for the productive development of areas reserved by the cooperative for its management.

    4. Income from such resources might be handled in a businesslike manner by the cooperative, subject to such supervision by the Department as might be necessary, without the usual detour of depositing tribal income in the United States Treasury and reappropriating the funds through acts of Congress.

    5. If economically desirable, the cooperative so organized might be given a preference right in the leasing of individual allotments of grazing or timber land, the award of individual oil or mineral leases, etc.

    Briefly, the difficulties of such a set-up as is here proposed are: (1) The task of securing cooperative organization among Indians who are now opposed to the Wheeler-Howard Act; (2) the task of revising existing regulations governing the lease of tribal and individual lands; (3) the possible disadvantages of suability and taxability under State laws.

    The advantages of such a set-up are briefly: (1) A functioning cooperative association would do a great deal to integrate tribes which have rejected the Wheeler-Howard Act and to give positive scope for efforts at economic self-government; (2) the measure would amount to a substantial subsidy of cooperative activities out of tribal income which might otherwise be used for administrative expenditures, per capita payments and other non productive purposes.

    If on the basis of this brief outline you feel further consideration of this suggestion to be worthwhile, I shall be glad to have further work done on any concrete situation to which the proposed remedy may be adapted.

Solicitor.
 


 

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DEPARTMENT OF THE INTERIOR

OCTOBER 23, 1936

LAW AND ORDER ORDINANCES--SAN CARLOS
APACHE

October 23, 1936.
Memorandum for the Commissioner of Indian Affairs:

    The attached papers relating to law and order ordinances of the San Carlos Apache Tribe are returned to you for further consideration.

    The proposed letter to the superintendent of the San Carlos Agency contains the advice that the ordinances adopted by the Council are invalid for the reason that they were not transmitted to this office within 90 days after their adoption on May 5, 1936. This conclusion appears to me to be invalid for three reasons.

    1. A number of the resolutions are not subject to departmental approval and therefore have been valid from the time of adoption regardless of whether or not they were transmitted to the Secretary. Ordinances or resolutions beginning at lines 3, 6 and 9 fall under Article V, section 12 of the constitution of the tribe approved January 17, 1936. This section authorizing regulation of domestic relations does not require departmental review. Likewise the resolutions beginning at line 72 (designing qualifications for jury duty) and line 84 (prohibition of professional attorneys) appear to be valid without departmental review under Article V, section 4 of the bylaws. These five resolutions therefore, are not dependent for their validity upon approval by the Superintendent or the Secretary.

    2. I do not agree with the legal conclusion that failure of the superintendent to submit to the Department, within the proper period of time, an ordinance subject to departmental review invalidates the ordinance. The constitutional provision in question specifies that the ordinance shall become effective when approved by the superintendent. The superintendent is then required to send a copy of the ordinance with his approval "to the Secretary of the Interior, who may, within 90 days from the date of enactment rescind the said ordinance or resolution for any cause, by notifying the tribal council of such rescission". The Secretary must act positively within the designated time limit to repudiate the act of his agent. In this case he has not so acted and therefore the ordinances or resolutions in question remain effective if they were validly approved by the superintendent. The proposed letter to the superintendent seems to assume that the ordinances were properly approved by the superintendent. The supporting papers, however, leave some doubt on the question. If the resolutions requiring departmental review were not properly approved by the local superintendent, they are, of course, null and void. If they were properly approved, they did not become invalidated by the silence of the Secretary or by the failure of the superintendent to carry out in due time his duty to transmit the resolutions to the Secretary.

    3. The proposed letter states that the resolutions in question were adopted on May 5, 1936, and were not submitted to the Department within 90 days after that date. The record shows, however, that these resolutions were adopted on February 3 and were received by the Indian Office on March 4. The action taken by the tribal council on May 5 was by way of ratification of the earlier action. If it is the position of the Indian Office that the earlier action was totally invalid because the council at that time had not been duly elected under the approved constitution of the tribe then the submitted resolutions should be attacked on that
ground, rather than on the ground that the subsequent ratification of May 5 was not promptly brought to the notice of the Department. The question whether the council of February 3, 1936, had authority to adopt the ordinances in question is a question of some difficulty, which I shall not attempt to answer because the relevant facts are not before me. It is clear, however, that if the council then sitting had been previously recognized as qualified to speak for the San Carlos Apache Tribe, then it was authorized under the departmental Law and Order Regulations to adopt ordinances on tribal marriages and divorce (Regulations, Chap. 3, sec. 2), gambling (Chap. 5, sec. 21) and professional attorneys (Chap. 1, sec. 8).

    Recommendation No. 3, referring to line 13, raises a further question. It seems to me that power to regulate the domestic relations of members may properly extend to granting a divorce to a member married to a non member where the marital residence is within the reservation. Certainly I think this would be true where the non member was a restricted Indian. There may be some doubt about the validity of a divorce decree issued against a non Indian, but I do not think the law is so clear that on a matter of this sort, not involving departmental review, we are obliged to advise the tribe that its action is illegal. We might properly advise the tribe, however, that the ordinance as now drafted would cover divorce proceedings between non Indians which was undoubtedly not intended and would be clearly illegal, and we might suggest appropriate rephrasing of the ordinance.

    The unfortunate complications and delays which
 


 

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OPINIONS OF THE SOLICITOR

OCTOBER 30, 1936

this record exhibits suggest to my mind the desirability of carefully advising newly elected tribal councils of the procedures they are expected to follow in their ordinance making activities.

                                                                                                                                            NATHAN R. MARGOLD,

Solicitor.
COLORADO RIVER INDIAN TRIBES OF
COLORADO RIVER RESERVATION-SURRENDER
OF RIGHTS OF EXCLUSIVE OCCUPANCY
October 29, 1936.
Memorandum for the Commissioner of Indian Affairs:

    Further study has been given to the organization of the Colorado River Indian Tribes of the Colorado River Reservation under a proposed constitution and bylaws with special reference to the possibility of settling other Indians upon said reservation pursuant to the act of March 3, 1865 (13 Stat. 559). The attached memoranda from the Land and Fiscal Divisions of your Office were solicited by me with a view to determining whether there had been any continuing administrative action by the Department in carrying out the placing of other Indians on the reservation in addition to the Mohave and Chemehuevi Tribes, or whether the administrative action in placing these tribes on the reservation constitutes a final determination of the Indians entitled to reside thereon.

    The two memoranda do not, I believe, indicate any continuous course of action by the Indian Office or by this Department involving the placing of other Indians on the Colorado River Reservation. The matter has apparently been revived only in the last few years. The memorandum from the Land Division indicates, moreover, that the original plan was to place only the Mohave and Chemehuevi Tribes, and Indians friendly to them, on the reservation. This being so, there appears to be no reason for altering my memorandum of September 15.

    The proposed letter suggesting correction in the tentative constitution and bylaws of the Colorado River Indian Tribes should, therefore, be revised by eliminating the last paragraph on pages 5 and 6 thereof. As a matter of law, the constitution may guarantee to the present occupants complete and exclusive control even as to future membership, and this in no way conflicts with the act of March 3, 1865 (13 Stat. 559). The Secretary of the Interior has no right to locate other Indians on this reservation without the consent of the tribes having jurisdiction over the reservation, and the Indians have a clear legal right to withhold their consent.

    If, as an administrative matter, it is felt to be essential to provide that other Indians be placed on the reservation, either to prevent overcrowding elsewhere, or to provide for proper utilization of the resources of this reservation, the proposed letter could contain a paragraph calling attention to this fact, and suggesting to the Indians that a provision be inserted in their constitution authorizing the placing of other Indians on the reservation. It should be made clear to the Colorado River Indians, however, that they do not need to yield their consent in this matter, and that their failure to agree will not result in failure by the Department to approve the constitution as soon as agreement has been reached on its other provisions. It would be inconsistent with the intent of section 16 of the Indian Reorganization Act, in my opinion, for the Secretary of the Interior to withhold approval of a constitution in order to compel these Indians to surrender their existing rights of exclusive occupancy of the Colorado River Reservation.

                                                                                                                                            NATHAN R. MARGOLD,

Solicitor.

RESTRICTED LANDS--SECURITY FOR LOANS

October 30, 1936.
Memorandum for the Commissioner of Indian Affairs:

    The attached letter holding that restricted lands may not be used as security for loans from Indian corporations to individual Indians is returned to you for further consideration. The proposed letter makes no mention of section 4 of the act of June 18, 1934. This section provides that restricted lands "may, with the approval of the Secretary of the Interior, be sold, devised, or otherwise transferred to the Indian tribe in which the lands * * * are located". In my opinion this provision amends the allotment statutes cited in the proposed letter and permits the transfer of title from an individual Indian to the tribe having jurisdiction over the land for security purposes.

    The view that the authority given individual Indians by the Reorganization Act to transfer their restricted lands to the tribe includes authority to
 


 

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DEPARTMENT OF THE INTERIOR

OCTOBER 30, 1936

convey a lesser interest by way of mortgage or other instrument given for security purposes, is supported by the cases of Terrell v. Scott, 262 Pac. 1071, cert. den. 277 U.S. 596, and Potter v. Vernon, 264 Pac. 611. Those cases held that a mortgage executed by a full blood Indian on lands inherited by him from an allottee of the 5 Civilized Tribes is valid when approved by the County Court. The applicable statute made no mention of mortgages but provided that the full blood heir could convey his inherited interest with the approval of the County Court. These decisions were followed by the United States District Court for the Northern District of Oklahoma in Wilson v. Tyler, No. 418 Equity. In the latter case the Department of Justice refused to take an appeal on the ground that the decision was right and in all probability would be affirmed by the Circuit Court of Appeals.

    Mortgage security, however, is complicated by the fact that the legal title to trust allotments is in the United States. The United States, therefore, would seem to be a necessary party to a foreclosure action and enforcement of the mortgage would thus depend upon a decision of the Attorney General consenting to suit.

    Such complications might be avoided by utilizing the mechanism of exchange assignments, set up by the Omaha Constitution. The land owned by an individual Indian might be transferred to the tribe, an exchange assignment being granted to the individual Indian containing the limitation that upon default in the payment of the tribal loan the right of occupancy vested in the individual should be terminated or, if the default is partial, that the amount of land held under assignment should be proportionately reduced. The validity of such a provision, applied to land which has been transferred to tribal ownership, appears to be beyond question.

    An alternative method of utilizing individual lands to secure loans from the tribe might be developed in the form of a conditional transfer of the land voidable upon repayment of the borrowed sum.

    Of course, nothing in this memorandum prevents your deciding as a matter of policy that individually owned restricted lands should not be used as security even when no other security is available. Such a decision might be restricted to cases where, as in the instant case, the tribe itself objects to the use of such security. Such a decision, however, should be placed upon grounds of policy and not upon grounds of law.

                                                                                                                                            NATHAN R. MARGOLD,

Solicitor.

PAWNEE--BACK ANNUITIES

November 2, 1936.

Memorandum for the Commissioner of Indian Affairs:

    The attached letter, in denying the claim of Delaney A. Capstick, a Pawnee Indian, for back annuities, announces the rule that the distribution of tribal property is confined to enrolled members of the tribe and that members of the tribe are entitled to share in such distribution only during the period their names appear on the roll.

    Nearly thirty years ago the Assistant Comptroller of the Treasury ruled that a child born of an Indian woman, who is a recognized member of the tribe, is entitled from birth to recognition and enrollment as a member of the tribe and to a pro rata share of tribal annuities or other communal benefits. The Assistant Comptroller said:

    "An Indian who is entitled by membership in a tribe to share in the annuities to other communal benefits of the tribe does not lose such right by the failure of an Indian Agent or other officer to enroll him for any particular payment. The right is inherent in every born member of the tribe from the date of birth. The appearance or absence of the name on the roll is only prima facie evidence. If the name of an Indian entitled to enrollment and payment be omitted from the roll for one or more payments, either by mistake of the agent or in pursuance of erroneous instructions, his right to the payment or payments is not thereby extinguished; but upon correction of the mistake, or countermand of the erroneous instructions, he may claim and have allowed the payment or payments which have been withheld by his nonenrollment". (13 Dec. Comp. 547, 552 (1907)).
    It is my understanding that, with the exception of certain persons whose names were added to the final rolls of the Five Civilized Tribes in Oklahoma under special legislation (see Solicitor's Opinion of November 10, 1914), the departmental practice has conformed to the ruling of the Assistant Comptroller. If this understanding is correct, I suggest that denial of the claim of Capstick for back annuities be based on grounds other than those set forth in the present letter, if such exist. If, on the other hand, my understanding of the departmental practice is incorrect, you may resubmit the present letter for further consideration. In the latter event, however, I should like to be advised
 


 

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OPINIONS OF THE SOLICITOR

NOVEMBER 17, 1936

of the administrative or judicial decisions which led to the departure from the Assistant comptroller's ruling of 1907.

Solicitor.
FT. HALL--CONFISCATION
OF FIREARMS
November 17, 1936.
Memorandum for the Commissioner of Indian Affairs:

    The attached letter and telegram relative to the proper disposition of firearms seized by Indian police from trespassers on the Fort Hall Reservation are returned herewith for further consideration:

    I have visaed the telegram, since I agree that, upon the facts thus far presented by Superintendent Gross, sale or destruction of the firearms cannot be justified. The explanatory letter, however, does not, in my opinion, present an entirely adequate statement of the legal points involved.

    It is true, no doubt, as urged in this letter, that the Fort Hall Reservation is a treaty reservation, that unauthorized hunting therein is a Federal offense under United States Code, Title 25, Section 216, and that proceedings in a Federal Court, under United States Code, Title 28, Section 41, to confiscate the firearms in question would be proper. All this, however, does not necessarily preclude action by the tribe itself in the control of unauthorized hunting. Acts of tribal Indians which are violations of Federal law, may, at the same time, be violations of tribal ordinances, and, where the Federal law is not invoked, may be punished in tribal or reservation courts.

    United States Code, Title 25, Section 218, for instance, provides that the general provisions of the Federal criminal code shall not extend "to any Indian committing any offense in the Indian country who has been punished by the local law of the tribe." This is a clear recognition of a concurrent jurisdiction of tribal and Federal courts over certain matters.

    Concurrent jurisdiction is likewise recognized in the departmental law and order regulations, approved November 27, 1933. These regulations prescribe punishments for many offenses, on the part of tribal Indians, which may be punished in the alternative, under Federal Law. Game violations are specifically placed in this category under Chapter 5, Section 20, of these regulations, and under other sections of the same chapter, assault and battery, theft, and liquor offenses may be punished in the Court of Indian Offenses, although in each of these cases the acts so punished may constitute offenses under Federal law. The regulations provide that the reservation court shall defer to Federal authorities in cases where the latter are willing to exercise jurisdiction. Where such jurisdiction is declined the bare fact of concurrent Federal jurisdiction does not exclude tribal action.

    The question, then, is what justification exists for tribal action, such as that reported by Superintendent Gross. Four possible sources of such authority merit consideration:

    1. The inherent rights of tribal government.

    2. Rights derived from equitable ownership of land.

    3. Rights derived from departmental regulations.

    4. Rights granted or recognized by the constitution of the tribe.

    1. Inherent rights of tribal self government may be invoked to justify punishment of members of the tribe but not of non members (Solicitor's Opinion, Powers of Indian Tribes, approved October 25, 1934 (M-27781), pages 9, 73, 82). Non members may be excluded or deported from the tribal jurisdiction (ibid. pages 55 to 58), but they are not otherwise subject to punishment at the hands of tribal authorities. Confiscation of firearms for non payment of a fine therefore appears to be without justification unless the persons involved are members of the Shoshone Bannock Tribes.

    2. Neither can the seizure of property or firearms be justified as an incident to the rights of possession which the tribe enjoys over tribal land. By virtue of such rights tribal authorities may use reasonable force to remove a trespasser from tribal lands, in accordance with the ordinary common law rule (ibid. page 57). A landowner, however, has no right to confiscate firearms or other property of a trespasser.

    3. Departmental law and order regulations approved November 27, 1935, authorize a tribal council to adopt ordinances governing hunting and authorize tribal courts to inflict certain penalties for violation of such ordinances. Such ordinances are, however, according to the express language of the regulation (chapter 5, section 20), binding only upon Indians. Furthermore, while the authorized penalty includes seizure of game, it does not include seizure of firearms. Therefore, no justification can be derived from the departmental law and order regulations for the action undertaken.

    4. Can the proposed disposition of firearms be justified by any provisions of the constitution of the tribe approved April 30, 1936? If the tribe since that date has adopted any ordinance on this subject such ordinance ought to have been sub-
 


 

700

DEPARTMENT OF THE INTERIOR

NOVEMBER 17, 1936

mitted to the superintendent and to the Secretary of the Interior for review under Article VI, section 1 (i), (k) or (l), which appear to be the only clauses under which hunting can be regulated by the tribe. The Department has not been advised of the enactment of any ordinance on this subject since the adoption of the tribal constitution.

    Unless, then, some basis of authority not yet brought to the attention of the Department can be established it would appear that the Fort Hall Business Council has not taken any valid action which would properly authorize a disposition of the firearms seized. Should the tribe desire to enact ordinances on this subject hereafter, such ordinances will receive careful and sympathetic consideration in this Office. There is no question but that ordinances providing for the removal of non Indian trespassers and for the seizure of game unlawfully taken from Indian land should be approved by the superintendent. On the other hand, ordinances providing for the confiscation of firearms involve delicate questions of law and administration, and it is suggested that any ordinance which the tribe may wish to adopt having this objective should be referred to the Department for further study before definite action is taken. Unless some latent difficulty or inadequacy is shown to exist in the statutory procedure now provided for the confiscation of weapons of trespassing hunters, it is believed as a matter of policy that this should be left to the existing Federal Machinery.

                                                                                                                                            NATHAN R. MARGOLD,

Solicitor.
PALM SPRINGS--FEES CHARGED TO
TOURISTS FOR USE OF FACILITIES
November 18, 1936.
Memorandum for the Commissioner of Indian Affairs:

    I am compelled to return, without approval, the attached proposed letter relative to the collection of fees on the Palm Springs Reservation since, although the serious situation presented demands remedial action, the particular remedy proposed cannot, in my opinion, be made legally effective. The proposal to issue a blanket prohibition against the collection by Indians of any fees, charges, dues or rentals within the Palm Springs Reservation, and at the same time to require tourists using Indian bath houses and other facilities to pay fees directly to the superintendent, involves legal assumptions which I am not prepared to endorse. It is not necessary, however, to determine how far the various steps in the proposed course of action may be legally authorized by the statutes cited in the letter submitted, since I am satisfied that none of the statutes cited grants the Secretary or his representatives the authority to require Indians to maintain bath houses or other facilities or to allow outsiders access to such facilities or access to tracts of tribal land occupied by Indians. Without the right to take this final step in enforcing the course of action proposed in the attached letter, the Indians would still be in a position to exclude whites who did not pay them the required fees. We might succeed in establishing a dual system of fees or entirely excluding outsiders from the reservation, but this would satisfy neither the outsiders nor any of the Indian factions involved in the controversy.

    Considerations of constitutional law and of administrative practice amplify the legal doubts attending the proposed course of action. In the first place the proposed action, in so far as it compels Indians to permit strangers access to buildings and enclosed land, raises serious constitutional questions under the 5th and 13th amendments. In the second place, the action proposed would be at variance with a long (and I think valuable) tradition which sanctions the custom of Pueblo Indians and other groups of levying fees upon strangers who attend Indian ceremonials, take photographs or enjoy other similar privileges. To hold that the Superintendent at the Palm Springs Reservation may prohibit Indians from charging fees within the reservation is to hold, in law, that a superintendent at any reservation has the same power. Against any such claims of authority, you and I and Secretary Ickes have, in the past, protested, and I think rightly.

    I am convinced that even if the Department should approve the proposed letter, the attempt to enforce the instructions it contains would lead to grave legal difficulties. Indians in possession of bathhouses or other facilities would, in all likelihood, continue to demand the accustomed fees of white outsiders seeking permission to enter. Should employees of the department seek to compel the admission of non-Indians to such facilities or areas, it seems quite likely, in view of the facts presented in the letter of Superintendent Dady and the implied threats in the telegram of the local white groups, that violence would result. In that conraise as a principal issue not the propriety of any tingency the case that would go to court would
 


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