United States v. Holt State Bank 24 27, 1925

• Decision Date: 01 February 1926
• Docket Number: No. 47,47
• Citation: 46 S.Ct. 197,270 U.S. 49,70 L.Ed. 465
• Parties: UNITED STATES v. HOLT STATE BANK et al. Argued April 24-27, 1925
• Court: U.S. Supreme Court

270 U.S. 49

46 S.Ct. 197

70 L.Ed. 465

UNITED STATES

v HOLT STATE BANK et al.

No. 47.

Argued April 24-27, 1925.

Decided February 1, 1926.

The Attorney General and Mr. W. W. Dyar, of Washington, D. C., for the United States.

[Argument of Counsel from page 50 intentionally omitted] Mr. A. N. Eckstrom, of Warren, Minn., for appellees.

Mr. Justice VAN DEVANTER delivered the opinion of the Court.

This is a bill in equity by the United States to quiet in it the title to the bed of Mud Lake-now drained and uncovered-in Marshall county, Minnesota, and to enjoin the defendants from asserting any claim thereto. After answer and a hearing the District Court entered a decree dismissing the bill on the merits. The United States appealed to the Circuit Court of Appeals, where the decree was affirmed (294 F. 161), and then by a further appeal brought the case here.

Mud Lake is within what formerly was known as the Red Lake Indian Reservation, which had an area exceeding 3,000,000 acres and was occupied by certain bands of the Chippewas of Minnesota. Most of the reservation, including the part in the vicinity of Mud Lake, was relinquished and ceded by the Chippewas comformably to the Act of January 14, 1889, c. 24, 25 Stat. 642, for the purposes and on the terms stated in that act. It provided that the lands when ceded should be surveyed, classified as 'pine lands' and 'agricultural lands,' and disposed of in designated modes; that such as were classified as agricultural should be disposed of under the homestead law at a price of $1.25 an acre; and that the net proceeds of all, whether classified as pine or agricultural, should be put into an interest-bearing trust fund for the Chippewas and ultimately disbursed for their benefit or distributed among them.

The cession became effective through the President's approval March 4, 1890. Thereafter the lands in the vicinity of Mud Lake were surveyed and platted in the usual way; the lake being meandered and represented on the plat as a lake. The tracts bordering on the lake were classified as agricultural, opened to homestead entry, and disposed of to homestead settlers; patents being issued in due course. The defendants now own and hold these tracts under the patents. After the homestead entries were allowed, and after most of them were carried to patent, the lake was drained and its bed made bare by a public ditch constructed under the drainage laws of the state. The United States then surveyed the bed with the purpose of disposing of it for the benefit of the Indians under the act of 1889, and later brought this suit to clear the way for such a disposal.

The lake in its natural condition covered an area of almost 5,000 acres and was traversed by Mud river, a tributary of Thief river, which was both navigable in itself and directly connected with other navigable streams leading to the western boundary of the state and thence along that boundary to the British possessions on the north.

The ditch which drained the lake was established as a means of fitting for cultivation a large body of swamp lands in that general vicinity. It is as much as 30 miles long, and, like Mud river, passes through the lake and discharges into Thief river. Its depth exceeds that of the lake, and its width and fall are such that it has drawn the water out of the lake. Its construction was begun in 1910, and was so far completed in 1912 that the lake was then effectively drained.

The swamp lands which the ditch was intended to reclaim were within the ceded portion of the Red Lake Reservation. Some had been disposed of under the act of 1889 and thus had passed into private ownership; but the absence of necessary drainage was preventing or retarding the disposal of the others. Congress caused an examination to be made to determine whether drainage was physically and economically feasible (Act June 21, 1906, c. 3504, 34 Stat. 352, and Act March 1, 1907, c. 2285, 34 Stat. 1033), and a report of the examination was made (H. R. Doc. No. 607, 59th Cong. 2d Sess.). Shortly thereafter Congress gave its assent to the drainage of the lands under the laws of the state by declaring that all lands not entered and all entered lands for which a final certificate had not issued should 'be subject to all of the provisions of the laws of said state relating to the drainage of swamp or overflowed lands for agricultural purposes to the same extent and in the same manner in which lands of a like character held in private ownership are or may be subject to said laws.' Act May 20, 1908, c. 181, 35 Stat. 169, § 1 (Comp. St. § 4970).

The laws of the state, to the application of which assent was thus given, authorized the establishment of public drainage ditches by judicial proceedings and provided that such ditches might be so established as to widen, deepen, change or drain any river or lake, even if navigable and whether meandered or not. Laws 1905, c. 230; Gen. Stat. 1913, §§ 5523, 5525, 5531, 5553, et seq. The ditch which drained Mud Lake was established by judicial proceedings begun under these laws after the congressional consent was given, and it is not questioned that those proceedings made it entirely lawful to construct the ditch through the lake and to drain it as an incident of the reclamation project in hand.

The defendants insist that the lake in its natural condition was navigable, that the state, on being admitted into the Union, became the owner of its bed, and that under the laws of the state the defendants, as owners of the surrounding tracts, have succeeded to the right of the state. On the other hand, the United States insists that the lake never was more than a mere marsh, that the state never acquired any right to it, that the surveyor should have extended the survey over it when he surveyed the adjacent lands, and that the United States is entitled and in duty bound to dispose of it under the act of 1889 for the benefit of the Chippewas.

Both courts below resolved these contentions in favor of the defendants; and whether they erred in this is the matter for decision here.

It is settled law in this country that lands underlying navigable waters within a state belong to the state in its sovereign capacity and may be used and disposed of as it may elect, subject to the paramount power of Congress to control such waters for the purposes of navigation in commerce among the states and with foreign nations, and subject to the qualification that where the United States, after acquiring the territory and before the creation of the state, has granted rights in such lands by way of performing international obligations, or effecting the use or improvement of the lands for the purposes of commerce among the states and with foreign nations, or carrying out other public purposes appropriate to the objects for which the territory was held, such rights are not cut off by he subsequent creation of the state, but remain unimpaired, and the rights which otherwise would pass to the state in virtue of its admission into the Union are restricted or qualified accordingly. Barney v. Keokuk, 94 U. S. 324, 338, 24 L. Ed. 224; Shively v. Bowlby, 152 U. S. 1, 47, 48, 57, 58, 14 S. Ct. 548, 38 L. Ed. 331; Scott v. Lattig, 227 U. S. 229, 242, 33 S. Ct. 242, 57 L. Ed. 490, 44 L. R. A. (N. S.) 107; Port of Seattle v. Oregon & Washington R. Co., 255 U. S. 56, 63, 41 S. Ct. 237, 65 L. Ed. 500; Brewer-Elliott Oil & Gas Co. v. United States, 260 U. S. 77, 83-85, 43 S. Ct. 60, 67, L. Ed. 140.

But, as was pointed out in Shively v. Bowlby, at pages 49, 57, 58 (14 S. Ct. 548), the United States early adopted and constantly has adhered to the policy of regarding lands under navigable waters in acquired territory, while under its sole dominion, as held for the ultimate benefit of future states, and so has refrained from making any disposal thereof, save in exceptional instances when impelled to particular disposals by...