Hood v. United States, 15267.

• Decision Date: 17 March 1958
• Docket Number: No. 15267.,15267.
• Citation: 256 F.2d 522
• Parties: Percy HOOD and Grace Hood, His Wife, Appellants, v. UNITED STATES of America, Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

256 F.2d 522 (1958)

Percy HOOD and Grace Hood, His Wife, Appellants, v. UNITED STATES of America, Appellee.

No. 15267.

United States Court of Appeals Ninth Circuit.

March 17, 1958.

Donald M. Bushnell, Ferndale, Wash., for appellants.

Perry W. Morton, Asst. Atty. Gen., Roger P. Marquis, Reginald W. Barnes, Attys., Dept. of Justice, Washington, D. C., Charles P. Moriarty, U. S. Atty., F. N. Cushman, Asst. U. S. Atty., Seattle, Wash., for appellee.

Before LEMMON, FEE and HAMLEY, Circuit Judges.

JAMES ALGER FEE, Circuit Judge.

The Hoods brought a suit in a Superior Court in the State of Washington against the United States to quiet title¹ to lands formerly within the boundaries of the Lummi Indian Reservation, but which are now indubitably owned by them in fee simple and upon which the United States claimed a lien.² The cause was removed to the federal court by the government,³ where a counterclaim for foreclosure of the lien was filed against the Hoods. The trial court held the lands were subject to a lien for the construction costs, together with operation and maintenance charges, of dikes built under Act of Congress to reclaim some 4,000 acres of land in and adjacent to the Reservation.

There are two questions involved. First, did Congress intend to and possess the power to impose a lien upon the lands here involved? Second, are charges for operation and maintenance a lien upon the lands?

The following facts appear from the record. The lands were patented to Mary Yah-Him-A-Loo, in fee simple, subject to restrictions against alienation in 1884. Pursuant to statute and regulations, Mr. Dickens, Superintendent of the Reservation, on November 10, 1925, executed a memorandum of sale of these lands to the Hoods, as Indian heirship property after the decease of the original patentee. At the same time, Dickens, as guardian of minor Indian heirs and the adult Indian heirs, executed a deed to the Hoods upon payment to Dickens, as Superintendent, of $2,515 on the purchase price of $10,100. The agreement provided that "upon payment in full * * * then and in such case a deed duly executed by said heirs * * * and approved by the Secretary of the Interior, shall be delivered to said Percy Hood and Grace H. Hood, his wife, conveying said land to them and their heirs pursuant to law." The other provisions gave the Secretary the option of forfeiture in the event of nonpayment and provided that the deed should be retained in escrow by the Commissioner of Indian Affairs and delivered to the purchaser upon payment in full. The deed deposited in escrow was executed by all twenty-three of the adult heirs before January 16, 1926.

On March 18, 1926, an Act was passed by Congress authorizing an appropriation for the construction of dikes to reclaim some 4,000 acres of land in and adjacent to the Lummi Indian Reservation.⁴ Some of the land was Indian land and some was owned by private individuals. The Act provided that the cost of the project would be distributed equitably among the lands in Indian ownership and those in private ownership which might be benefited by the project. A lien was imposed upon all Indian land for the pro rata share, and the existence of the lien was to be recited in any patent issued therefor. It was provided that no money should be expended for construction on account of any lands in private ownership until repayment contracts were executed by the owners of the private lands benefited, by which liens would be imposed thereon also.

The deed in accordance with the land sale contract was executed by the twenty-three heirs of Mary Yah-Him-A-Loo and by the Superintendent, Walter F. Dickens, as legal guardian for four named minors, on November 10, 1925, and was approved by the Secretary of the Interior, by his Assistant, on or about August 10, 1926. Two deeds covering the individual interests of the minors were also executed by the Superintendent and also approved by the Secretary. Hood then was given a copy of the contract signed by the Superintendent and bearing the approval of the Secretary, but all the deeds were retained in escrow. After the Hoods had paid the notes for the balance of the purchase price, the deeds above described were delivered out of escrow to the Hoods on or about the month of April, 1928.

As to a great deal of acreage, the Department of the Interior did not obey the specific injunction of Congress that no money should be expended until repayment contracts were executed by the owners of private lands benefited.⁵ Instead, the construction was completed and on August 19, 1930, the Secretary of the Interior promulgated, pursuant to Section 4 of the Act of March 18, 1926, his "public notice" reciting that he was distributing the total cost of the project among the lands benefited, in accordance with a schedule made a part of the notice by reference. 25 C.F.R. § 144 (1949). In this schedule there were included lands of a number of white owners who had not signed the "repayment contract" provided by law. It is notable that the Secretary of the Interior listed the Hoods as white owners. Thereafter, the agents of the Secretary of the Interior attempted to obtain contracts from all who had not signed. The Hoods, among others, have never signed a "repayment contract."

Because of the confusion caused by the publication of the public notice and the schedule of charges, the Hoods and others holding land in white ownership, against whom a lien was apparently imposed under its terms, commenced suit to clear title against the United States. The cause was removed to the federal District Court. After trial, the court found all the plaintiffs other than the Hoods entitled to have titles to their several lands quieted against the asserted lien of the government. Foreclosure against the lands of the Hoods on the counterclaim of the government was decreed. This appeal followed.

At the threshold, this Court was confronted with the question of jurisdiction. A reargument of the case on this feature was required. No lien claimed upon any of the several parcels amounted to $3,000. A similar case had originally been commenced by certain landowners in the federal District Court, but was later dismissed by our opinion in Wells v. Long, 9 Cir., 162 F.2d 842. Thereupon, the instant suit was commenced in the state court and was removed by the government pursuant to 28 U.S.C.A. § 1444. If it now be held that this cause must be dismissed on jurisdictional grounds, the enactment will be for all practical purposes meaningless.⁶

The cardinal concern of the United States is that all cases in which the interests of the government are involved may be tried in federal fora. Such interests may be vitally enmeshed in a case which is of negligible pecuniary value. The judicial power of the federal courts extends to any controversy to which the United States is a party.⁷ There are other statutes which accord to the United States the right to remove certain cases at its sole option without regard to the amount in controversy.⁸ If then the right of removal here is denied, the government will be forced to foreclose liens of a value less than $3,000 in the state courts, unless an independent suit is first filed in the federal court. The fact that the United States did remove and affirmatively sought to foreclose these liens by counterclaim establishes conclusively the interest of the United States here.⁹ The right to remove cannot be denied. The trial court asserted jurisdiction. We hold this conclusion correct, since the removal statute seems plain.¹⁰

It is first urged that the Indian predecessors of the Hoods held fee simple title to these lands, subject to a restraint upon alienation, in that the approval of the Secretary of the Interior upon a conveyance was required. It is further contended by the Hoods that a restricted fee patent¹¹ had already issued to such Indians, and that, if the allotment act contemplated that a reservation of liens would be included in the patent, a special clause would be required therein. Thus the contention is made that the trustee is bound not to impose additional burdens upon the estate. Upon the other hand, the government claims that there is no substantial difference between restricted property and trust property and that Congress has a right to legislate for the purpose of protecting those who are unable yet to assume a fully independent status as to their property, even though individual property rights may be impaired. We do not examine the merits of, or pass upon, these questions.

The position taken by the Hoods, that there is no lien in existence upon these lands in favor of the government by virtue of the Act of Congress, may be sustained upon several grounds. The Act of Congress applied a lien to lands in Indian ownership.¹² It is demonstrable that this real property was not in Indian ownership even when the act became law. Furthermore, by any standard, title to this parcel had passed to the Hoods before the prescribed procedure of the Act to establish the lien had been initiated, to say nothing of procedure to perfect it. There are three methods of establishing these facts. First, the agents charged with the administration in construing the statutes relating to trust and restricted lands of Indians had long recognized that a contract by the United States to convey title thereto, signed by the appropriate agent, removed the land from government jurisdiction except for the purpose of enforcing the promises of the vendee or of rescinding upon default.

It is universally held that the course of conduct of the officers of an agency of the United States, who are chosen to construe and enforce laws relating to a particular subject, if long continued, will be given great weight in interpreting the statutes they administer, and will have binding force of law. This is called the doctrine of administrative construction.¹³ The Department of the Interior has long recognized that a sale...