Brewer-Elliott Oil & Gas Co. v. United States

• Decision Date: 14 December 1920
• Docket Number: 5434.
• Parties: BREWER-ELLIOTT OIL & GAS CO. et al. v. UNITED STATES et al.
• Court: U.S. Court of Appeals — Eighth Circuit

270 F. 100

BREWER-ELLIOTT OIL & GAS CO. et al. v. UNITED STATES et al.

No. 5434.

United States Court of Appeals, Eighth Circuit.

December 14, 1920

About 1913 oil and gas were discovered in the bed of the Arkansas river north of the thread of the main channel thereof, which was the south boundary of the lands of the Osage Tribe of Indians. Thereupon the state of Oklahoma leased to certain oil corporations parts of the bed of the Arkansas river above the mouth of the Grand river between the high-water mark on the north side of the river and the thread of the main channel, and authorized them to take the oil and gas therefrom in consideration of certain royalties specified in these leases. The defendants in this case are parties claiming under these leases. In 1914 the United States, as trustee for the Osage Tribe, under the Allotment Act of June 28, 1906, 34 Stat. Secs. 2, 3, 4, pp. 542, 543, and 544 claimed that these parts of the bed of the river and the oil and gas therein were the property of that tribe under grants thereof made in 1838 and 1872, and brought this suit against those claiming under these leases, for an injunction against the extraction of the oil and gas by them, and for other relief. The defendants answered that the river was navigable that the title to the leased premises between high-water mark and the thread of the main channel of the river vested in the state of Oklahoma, wherein these lands are situated, on its admission to the Union, and that its leases were valid. The United States insisted that the river was not and never had been navigable. The state of Oklahoma and the Commissioners of its Land Office intervened and asserted the navigability of the river at the places leased and the title of the state to the premises in controversy. The parties stipulated that a receiver be appointed to collect and hold the royalties under the leases for the benefit of the party who should ultimately be adjudged entitled thereto. Such a receiver was appointed and the lessees proceeded thereafter to extract the oil and gas and pay the royalties to the receiver. The issues were tried, the court below adjudged that the river was not and never had been navigable; that the Osage Tribe was the owner of the land in the bed of the river in controversy and the oil and gas therein under the patent of the United States to the Cherokee Nation of December 1, 1838, and the treaties between them in performance of which that patent was made and delivered, under the Act of June 5, 1872, 17 Stat. 228, 229 and the deed of the Cherokee Nation to the Osage Tribe of June 14, 1883; under the Treaty of July 19, 1866, 14 Stat. 799; under the Treaty between the United States and the Osage Tribe of September 29, 1865, 14 Stat. 687, 690, art. 16; and under the Act of July 15, 1870, 16 Stat. 362, in pursuance of which that deed to the Osage Tribe was made. Thereupon the court rendered a decree in favor of the United States for the benefit of the Osage Tribe for the relief sought by the United States in its complaint. The defendants and the interveners appealed from this decree.

W. A. Ledbetter and John H. Miley, both of Oklahoma City, Okl. (S. P. Freeling, Atty. Gen., and H. L. Stuart, R. R. Bell, and E. P. Ledbetter, all of Oklahoma City, Okl., on the brief), for appellants other than Arkansas River Bed Oil & Gas Co.

Paul Pinson, Sp. Asst. Atty. Gen. (Herbert M. Peck, U.S. Atty., of Oklahoma City, Okl., on the brief), for appellee United States.

James B. Diggs, of Tulsa, Okl. (Rush Greenslade and William C. Liedtke, both of Tulsa, Okl., R. L. Batts, of Pittsburg, Pa., and D. Edward Greer and John E. Green, both of Houston, Tex., on the brief), for appellee Gypsy Oil Co.

John J. Shea and Thomas F. Shea, both of Tulsa, Okl., and T. Austin Gavin, amici curiae.

Before SANBORN and CARLAND, Circuit Judges, and MUNGER, District judge.

SANBORN Circuit Judge (after stating the facts as above).

The appellants assigned 12 alleged errors in the hearing and disposition of this case, but when reduced to their lowest terms they present only two questions that, in the view the court takes of the facts and the law, it is necessary to consider and decide. Those questions are: (1) Did the court below make a mistake of fact in its finding that the Arkansas river was not navigable at the place of the premises in controversy? (2) If it was not mistaken in its finding of fact upon that subject, did it fall into an error of law because, although that river was not and never had been in fact navigable, it did not hold and adjudge as a matter of law that it was navigable, and that the title to its bed below high-water mark and to the oil and gas therein was in the state of Oklahoma, and not in the Osage Tribe, in view of the decision of the Supreme Court of Oklahoma in State v. Nolegs, 40 Okl. 479, 486, 139 P. 943, rendered in March, 1914, to that effect.

In determining whether or not the river was navigable in fact, the court below stated the rule by which it measured the evidence upon that subject in these words:

'It will be deemed navigable, when used or susceptible of use, in its ordinary condition, as a highway of trade and travel in the customary modes on water. * * * To meet the test * * * a water course should be susceptible of use for the purposes of commerce or possess a capacity for valuable floatage in the transportation to market of the products of the country through which it runs.'

And it cited in support of that rule The Daniel Ball, 10 Wall. 557, 19 L.Ed. 999, The Montello, 20 Wall. 441, 22 L.Ed. 391, United States v. Cress, 243 U.S. 316, 37 Sup.Ct. 380, 61 L.Ed. 746, United States v. Rio Grande Irrigation Co., 174 U.S. 690, 19 Sup.Ct. 770, 43 L.Ed. 1136, and Harrison v. Fite, 148 F. 781, 78 C.C.A. 447. Counsel for the appellants argue that this rule was erroneous in that it failed to declare that a stream is navigable if it can be so improved as to make it useful as a highway of travel and transportation. But it is obvious that the modification of the test adopted by the court by the insertion or addition of such a declaration would immediately raise the question whether or not a stream is navigable which was not, but might be made useful for transportation purposes at an expense far above the value of its possible use, and, if not, what the determining limit of such expense should be and thus the test would be rendered indefinite and impracticable. No persuasive reason or authority has been presented or discovered for such a modification of the rule applied by the chancellor below. That rule is sustained by the decisions of the Supreme Court and of this court, and there was no error in its statement or application in the hearing and decision of this case.

Upon the issue of the navigability of the Arkansas river above the mouth of the Grand river and at the place of the leased lands a vast mass of evidence was introduced, consisting, among other items, of the government surveys and meander lines of the river, congressional appropriations for its improvement, congressional grants of the privilege of constructing bridges over it, opinions and decisions of the officials of the Interior Department and of the officials of the War Department at various times with reference to the river's navigability, reports of the engineers of the War Department at various times relevant to this question, testimony of engineers who had been in charge of work on the river and of engineers who had been familiar with it, and the testimony of many other witnesses, many of whom had resided near it for many years, and all of whom were more or less acquainted with the river and its condition at various times in the past at and near the place under consideration and at other places above the mouth of the Grand river. For a more extended portrayal of this evidence reference is made to the opinion below, where the District Judge with enviable patience and clarity has set down the extent and character of this evidence and expressed his opinion of its effect. United States v. Brewer-Elliott Oil & Gas Co. (D.C.) 249 F. 609, 617, 624. No purpose would be served by reciting in detail here or by discussing this evidence. Suffice it to say that all the evidence on this issue and all the objections thereto have been exhaustively examined in the light of the arguments and briefs of counsel, and the conclusion is that the competent and relevant evidence on this subject leaves no doubt that the fact is, as the court found it to be, that the Arkansas river above the mouth of Grand river and at the place of the leased premises is not now and never has been a navigable stream.

But counsel for the appellants earnestly maintain that, although the fact is that the river is and always was unnavigable at the locus in quo, the question of its navigability is a question of the local law of the state of Oklahoma, that by the local law of that state, evidenced by the decision of its Supreme Court on March 10, 1914, in State v. Nolegs, 40 Okl. 479, 139 P. 943, the Arkansas river at the place of the leased lands in controversy is a navigable stream, and that the court below ought so to have held under the established rule that the decisions of the highest judicial tribunal of the state regarding its Constitution and statutes and local law which established settled rules of property in that state are controlling authority in the courts of the United States where no question of rights under the Constitution or laws of the nation and no question of general or commercial law is involved. Lloyd et al. v. Fulton, 91 U.S. 479, 482, 23 L.Ed. 363; Jaffray v. McGehee, 107 U.S. 361, 364, 365, 2 Sup.Ct. 367, 27 L.Ed. 495; Detroit v. Osborne, 135 U.S. 492, 10 Sup.Ct. 1012, 34 L.Ed. 260; Paine v....