Security State Bank v. Pierre

• Decision Date: 20 June 1973
• Docket Number: No. 12325,12325
• Citation: 511 P.2d 325,162 Mont. 298
• Parties: The SECURITY STATE BANK, a corporation, Plaintiff and Respondent, v. Isaac Richard PIERRE, same as Richard Rierre, Defendant and Appellant.
• Court: Montana Supreme Court

Page 325

511 P.2d 325

162 Mont. 298

The SECURITY STATE BANK, a corporation, Plaintiff and Respondent, v. Isaac Richard PIERRE, same as Richard Rierre, Defendant and Appellant.

No. 12325.

Supreme Court of Montana.

Submitted May 31, 1973.

Decided June 20, 1973.

Richard A. Baenen argued, Washington, D. C., Victor F. Valgenti appeared, Missoula, for defendant and appellant.

F. N. Hamman, Christian, McCurdy, Ingraham & Wold, Polson, F. L. Ingraham argued, Polson, for plaintiff and respondent.

Jean A. Turnage argued, Polson, Sam E. Haddon argued, Missoula, for amicus curiae.

JOHN C. HARRISON, Justice.

This is an appeal from an order of the district court of the fourth judicial district, county of Lake, Hon E. Gardner Brownlee, judge presiding, granting default judgment against an enrolled Indian. The cause was originally heard in this Court in December 1972, and an opinion issued in February 1973, which was recalled and the cause was reheard on May 31, 1973.

The sole issue on appeal is whether the state courts of Montana have jurisdiction over a civil dispute involving a commercial transaction entered into on the Flathead Reservation between an enrolled member of the Confederated Salish and Kootenai Tribes residing on the reservation and a nonmember.

The relevant facts are not in dispute and were stipulated to at a hearing before the trial court. Judge Brownlee for hearing purposes joined this case and the case of Ronan State Bank v. Jewett, due to the fact the same jurisdiction question was involved.

In view of the complexity of jurisdiction questions involving Indian reservations and the number of cases that this Court is receiving, we will detail the stipulated facts with the thought that somewhere in the federal appellate process the final authority will be able to more clearly understand the perplexity of state jurisdictional problems and the near impossibility of their solution due to prior federal decisional case law.

Defendant Isaac Richard Pierre is an enrolled tribal member, living within the confines of the reservation. Pierre borrowed money from plaintiff Security State Bank giving a note as evidence of the loan at Polson, Montana, located within the exterior boundaries of the Flathead Indian Reservation. Such reservation is located in four counties of the state, Missoula, Lake, Sanders and Flathead, and consists of approximately 1,250,000 acres of which 615,418 acres is trust land. The total resident membership of the tribe is 19 percent of the total population living within the exterior boundaries of the reservation. The full blood enrollment of the tribe is 3.3 percent. Defendant Pierre possesses three quarters Indian blood. In 1924, all persons of Indian heritage were declared United States citizens. The Flathead Tribe was incorporated as a federal corporation under the Wheeler-Howard Act in 1935, the Indian Reorganization Act, 25 U.S.C. § 461 et seq.

Under the provisions of the federal charter the tribe is to be self-governing and one of its powers is to set up a court system. The Flathead Tribal Court has a chief judge and three associate judges who try cases and when necessary the three associate judges serve as an appellate court. These judges are not legally trained but are lay people, similar to justices of the peace. There is no appellate procedure from a decision of the three judge tribal court.

Following the original recalled opinion in the instant case, this Court decided another Indian jurisdictional matter, State ex rel. Mary Iron Bear v. District Court of Fifteenth Judicial District, Mont., 512 P.2d 1292. In Iron Bear the Court said:

'Before a district court can assume jurisdiction in any matter submitted to it, it must find subject matter jurisdiction by determining: (1) whether the federal treaties and statutes applicable have preempted state jurisdiction; (2) whether the exercise of state jurisdiction would interfere with reservation self-government; and (3) whether the Tribal Court is currently exercising jurisdiction or has exercised jurisdiction in such a manner as to preempt state jurisdiction.'

Here, not one of the Court's required three tests is met. At the time of the filing of the instant case in the district court the Tribal Court was in existence though it had no ordinance on debt actions nor was it possible for a nonIndian to sue an Indian unless the Indian stipulated to being sued. However, that situation has now changed and limited debt actions can now be filed in Tribal Court and nonIndians can sue tribal members.

The trial court and this Court received comprehensive briefs from the parties. Defendant relies on a number of recent Montana cases: Kennerly v. District Court, 400 U.S. 423, 425, 91 S.Ct. 480, 27 L.Ed.2d 507; Crow Tribe v. Deernose, 158 Mont. 25, 487 P.2d 1133; Blackwolf v. District Court, 158 Mont. 523, 493 P.2d 1293; State ex rel. Iron Bear v. District Court, Mont., 512 P.2d 1292.

Defendant argues the facts here and those in Kennerly cannot be distinguished therefore Kennerly controls and the action of the trial judge should be reversed. In Kennerly, two members of the Blackfeet Indian Tribe, residing on the Blackfeet Indian Reservation, purchased over $200 worth of food on credit from a grocery store located on the reservation and refused to pay after the goods were consumed. Suit was begun in the state district court against the Indians to collect the debt. Defendant Indians moved to dismiss the suit on the grounds the state court lacked jurisdiction due to the fact defendants were members of the Blackfeet Tribe and the transaction took place on the reservation.

The district court overruled defendants' motion and defendants applied to this Court for a writ of supervision which was granted. In its opinion, this Court upheld the action of the district court. State ex rel. Kennerly v. Dist. Court, 154 Mont. 488, 466 P.2d 85. On a writ of certiorari to the United States Supreme Court, that court overruled this Court's decision holding that the state of Montana lacked jurisdiction over the Indians of the Blackfeet Tribe because the state had never taken the necessary 'affirmative legislative action' concerning either civil or criminal jurisdiction with respect to the reservation. The United States Supreme Court quoted from the Act of August 15, 1953, 67 Stat. 590, Section 7, which provides:

'The consent of the United States is hereby given to any other State not having jurisdiction with respect to criminal offenses or civil causes of action, or with respect to both, as provided for in this Act, to assume jurisdiction at such time and in such manner as the people of the State shall, by affirmative legislative action, obligate and bind the State to assumption thereof.'

A result of the Kennerly decision was to dry up credit sources throughout the state to responsible Indian citizens, a void not filled by and federal source.

However, in this case, unlike Kennerly, the state has passed enabling legislation with respect to jurisdiction over Indians residing on the Flathead Reservation. Title 83, Chapter 8, sections 83-801 through 83-804, R.C.M.1947, provides for the assumption of civil and/or criminal jurisdiction over Indians of the Flathead Tribe and the time and manner by which such jurisdiction could be assumed. The legislature conditioned assumption of jurisdiction by the state on the written consent of the tribe, as expressed by a formal resolution. A pertinent provision of section 83-802, R.C.M.1947, reads:

'Whenever the governor of this state shall receive from the tribal council or other governing body of the Confederated Salish and Kootenai Indian tribes, community, band or group of Indians in this state, a resolution, expressing its desire that its people and lands be subject to the criminal and/or civil jurisdiction of the state of Montana to the extent authorized by federal law and regulation, he shall issue within sixty (60) days a proclamation to the effect that such jurisdiction shall apply to those Indians and their territory, or reservation in accordance with the provisions of this act. * * *'. (Emphasis added).

State law precludes Montana from assuming jurisdiction over Indians on the reservation not tendered by the tribes by formal resolution. In a recent case, State ex rel. McDonald v. District Court of Fourth Judicial District, Mont., 496 P.2d 78, 80, we reviewed the steps taken by the Flathead Tribe in presenting a resolution to the governor on accepting state jurisdiction:

'Tribal consent to the assumption of criminal jurisdiction by the state courts of Montana over Indians committing crimes on the Flathead Indian Reservation was granted by the enactment of Tribal Ordinance 40-A, dated May 16, 1964. The governor of Montana thereafter issued the required proclamation on June 30, 1964. Almost a year later on May 5, 1965 Tribal Ordinance 40-A (Revised) was enacted. This Ordinance was similar to the original Ordinance 40-A except for clarifying language limiting its scope to criminal laws and repealing the original Ordinance 40-A. The governor of Montana...