Osage Tribe of Indians v. Ickes

• Decision Date: 19 March 1942
• Docket Number: Civil Action No. 10787.
• Citation: 45 F. Supp. 179
• Parties: OSAGE TRIBE OF INDIANS et al. v. ICKES et al.
• Court: U.S. District Court — District of Columbia

45 F. Supp. 179

OSAGE TRIBE OF INDIANS et al. v. ICKES et al.

Civil Action No. 10787.

District Court of the United States for the District of Columbia.

March 19, 1942.

T. P. Gore and Leslie C. Garnett, both of Washington, D. C., for plaintiffs.

Thomas L. McKevitt and Ralph S. Boyd, both of Washington, D. C., Attys., Department of Justice, for defendant Harold L. Ickes, Secretary of the Interior of the United States.

Peter Q. Nyce and Roy St. Lewis, both of Washington, D. C., and Sim T. Carman, Co. Atty., and Charles R. Gray, both of Pawhuska, Okl., for defendant Tom H. Fraley, Treasurer of Osage County, Okl.

Before MILLER and VINSON, Associate Justices of the United States Court of Appeals for the District of Columbia, and LETTS, Justice of the District Court of the United States for the District of Columbia, holding a Three Judge Statutory Court.¹

MILLER, Associate Justice.

Plaintiff, the Osage Tribe of Indians, brought this suit in its own right and through its Principal Chief, Fred Lookout, to restrain the Secretary of the Interior, Harold L. Ickes, from paying to defendant, Tom H. Fraley, Treasurer of Osage County, Oklahoma, the sum of $1,535.70, part of the proceeds of royalties from gas and oil leases which had been executed by the Tribal Council. The royalties thus received were required by the Act of June 28, 1906,² to be placed in the Treasury of the United States to the credit of the members of the Tribe for the use and benefit of the individual members of the Tribe. The 1906 Act also provided for taking a tribal roll and for equal division of the tribal lands and funds among the members of the Tribe. It provided for allotment of the surface of the land in severalty among the members of the Tribe³ but reserved mineral rights to the use of the Tribe for a period of twenty-five years, after which they were to become the property of the individual owners of the land, unless otherwise provided for by Act of Congress.⁴ The Tribal Council was authorized to make leases for the mineral rights with the approval of the Secretary of the Interior.⁵ Section 4 of the Act⁶ provided: "That all funds belonging to the Osage tribe, and all moneys due, and all moneys that may become due, or may hereafter be found to be due the said Osage tribe of Indians, shall be held in trust by the United States for the period of twenty-five years from and after the first day of January, nineteen hundred and seven, * * *." Italics supplied Section 4 of the Act of 1906⁷ also provided that the funds therein specified should be segregated and placed to the credit of the individual members of the Tribe; these credits to draw interest, which when accrued was to be paid quarterly to the members entitled. Royalties from mineral leases were likewise to be placed in the Treasury to the credit of the members of the Tribe and distributed to the individual members "in the manner and at the same time that payments are made of interest, on other moneys held in trust * * *" Italics supplied with the exception of sums reserved for schools, agency, and emergency funds.

Section 5 of the 1906 Act⁸ provided that "at the expiration of the period of twenty-five years from and after the first day of January, nineteen hundred and seven, the lands, mineral interests, and moneys, herein provided for and held in trust by the United States shall be the absolute property of the individual members of the Osage tribe * * * as herein provided, and said members shall have full control of said lands, moneys, and mineral interests, except as hereinbefore provided" with the right of inheritance according to Oklahoma laws.⁹ In 1929,¹⁰ pursuant to the power expressly reserved in the 1906 Act, the earlier Act was so amended as to extend the term of the trust until 1959. In 1921 the reservation to the Tribe, of minerals under the land, was extended to 1946.¹¹ And by the Act of 1921,¹² the Act of June 6, 1906 was also so amended as to permit the State of Oklahoma to levy a gross production tax upon all oil and gas produced in Osage County, in lieu of all other state and county taxes theretofore levied on the production of gas and oil in that county. The 1921 Act also provided that the Secretary of the Interior should pay one per centum of royalties received under the Indians' gas and oil leases to Osage County for use in construction of roads and bridges.¹³

Pursuant to the 1921 Act, the gross production tax levied by the State of Oklahoma has been paid by the oil companies producing gas and oil under the tribal leases, and the Secretary of the Interior has paid to Osage County approximately $1,092,338.17 for construction of roads and bridges. Provision for payment of this one per centum of royalties was discontinued by Act of Congress in 1940.¹⁴ There still remains, however, an undistributed residue of the one per centum fund amounting to $1,535.70. This is the subject of the present suit. The complaint contains, among others, the following allegation: "* * * plaintiffs aver that the provisions of said Section 5 of the Act of March 3, 1921, authorizing and directing the Secretary of the Interior `to pay, through the proper officers of the Osage Agency, to Osage County, Oklahoma, an additional sum equal to 1 per centum of the amount received by the Osage Tribe of Indians as royalties from production of oil and gas, which sum shall be used by said county only for the construction and maintenance of roads and bridges therein' * * * was an unconstitutional taking and deprivation of plaintiffs' property or moneys, and was repugnant to the Constitution of the United States in that it deprived the plaintiffs of their property without compensation and without due process of law." The prayer of the complaint asks (1) a permanent injunction restraining the Secretary from distributing to Osage County the residue of the fund above described; (2) a direction to the Secretary to distribute the said sum of $1,535.70 to the Osage Indians; (3) that a statutory three judge court be constituted to hear and determine the application for injunction.¹⁵ Thereafter, on May 29, 1941, the defendant, Harold L. Ickes, moved to dismiss the complaint for the reason that the United States of America is an indispensable party defendant, which has not consented to be sued and which cannot be sued without its consent. On the same date defendant Fraley also filed a motion to dismiss, but for reasons which will appear, it is not necessary to consider his motion further. On June 14, 1941, plaintiffs filed an application containing the following statement: "Since the complaint seeks an injunction to restrain the payment of funds under said Act of Congress upon the ground that a part of said Act is repugnant to the Constitution of the United States, application is made for an injunction and for a request to the Chief Justice of the United States Court of Appeals for the District of Columbia to designate two other Judges to participate in hearing and determining this application." On October 3, 1941, upon the request of Associate Justice F. DICKINSON LETTS, of the District Court of the United States for the District of Columbia, the present three judge statutory court was constituted, by order of Chief Justice D. LAWRENCE GRONER, of the United States Court of Appeals, to hear and determine the application.

Upon the hearing, which was held pursuant to the foregoing order, counsel for defendants insisted upon disposition of the pending preliminary motions, as was their right. The court heard argument upon all phases of the case; assuming for purposes of the argument that the question of constitutionality presented in the complaint and application might also be involved in the determination of the preliminary motions. We have concluded, however, that the motion to dismiss is well founded and should be granted for the following reasons.

The United States is an indispensable party to this suit. Plaintiffs' position is that by virtue of the Act of 1906, the royalties were placed to their individual credit, not as trust funds, but as segregated, individual property of the members of the Tribe; hence, that Congress lacked the power to confer, upon the Secretary, authority to distribute any part of the funds to Osage County; consequently, that the Act of 1921 deprived them of property, in disregard of their vested rights. The Government contends that the United States is a trustee of the funds, with power to act with respect to them; consequently, that it is interested, adversely to plaintiffs, and is an indispensable party to a suit involving the right to the fund in dispute. We see no escape from the logic of the Government's contention. If the present case were to go to trial and judgment, and if in such a judgment plaintiffs' contention should be maintained, it is obvious that the claim of the United States, that it is a trustee in possession, with power to act, would be decided against it, without an opportunity to be heard.

As was said by the Supreme Court in Morrison v. Work,¹⁶ the claim of the United States is at least a substantial one. No more is necessary for disposition of the motion to dismiss.¹⁷ The decision in the Morrison case is directly applicable and conclusive.

It is, consequently, unnecessary to decide any constitutional question; and, being unnecessary, we refrain from doing so;¹⁸ thus giving full recognition to the presumption of constitutionality.¹⁹ The Government's interest, and the indispensability of the United States as a party, depends upon the relationship which exists between it and the Indians generally²⁰ and, particularly, upon the power asserted in the 1906 Act.²¹ Plaintiffs do not challenge the constitutionality of that Act or the power therein asserted. Indeed, they rely upon it to assert their alleged cause of action. If their interpretation of the 1906 Act is wrong, then, presumably, their attack upon the 1921 Act fails. In any event, this is the very heart of...