United States v. Seminole Nation

• Decision Date: 03 June 1959
• Docket Number: No. 3-58.,3-58.
• Citation: 173 F. Supp. 784
• Parties: UNITED STATES v. SEMINOLE NATION.
• Court: U.S. Claims Court

173 F. Supp. 784

UNITED STATES v. SEMINOLE NATION.

No. 3-58.

United States Court of Claims.

June 3, 1959.

Clifford R. Stearns, Washington, D. C., with whom was Perry W. Morton, Asst. Atty. Gen., for appellant, United States.

Paul M. Niebell, Washington, D. C., Roy St. Lewis, Washington, D. C., on the brief, for appellee, Seminole Nation.

JONES, Chief Judge.

This is an appeal by the United States,¹ defendant below, of a final determination by the Indian Claims Commission that petitioner, the Seminole Nation, is entitled to recover from the Government the sum of $34,213.66, less offsets of $160.00, or the net sum of $34,053.66. The basis for the award was the Commission's decision that, under the circumstances of the case, the Secretary of the Interior failed to discharge a duty owed by the Government to the appellee Indians in not canceling a sale of Seminole Nation land and reselling it for the benefit of the Indians at its enhanced value.

The land involved in this suit consists of a 320-acre tract located in Seminole County, Oklahoma. Referred to as the Emahaka School tract, it was, at the time of its sale and conveyance, the property of the Seminole Nation.² An appraisal of the tract was made in 1919 by officials of the Department of the Interior. As a consequence, a value of $16,700 was assigned to the land, a sum which included $6.00 an acre for oil and gas, and $2,000 for improvements.

At about this same time, and shortly before sale of the tract at public auction, the drilling of a test well located one and one-quarter miles north of the Emahaka School tract was begun. The Superintendent of the Five Civilized Tribes, Muskogee, Oklahoma, was notified in a letter dated January 23, 1920, of this fact by the United States Oil Inspector, and of the probable enhancement in value of the Emahaka School tract should the well be completed.

On May 26, 1920, the Department of the Interior granted authority to the Superintendent of the Five Civilized Tribes at Muskogee, Oklahoma, to sell the Emahaka School tract at public auction to the highest bidder under the provisions of the Act of April 30, 1908, 35 Stat. 70, 71,³ for an amount not less than the appraised value. At or about this time the 1919 appraisal was revised by the Government by increasing the mineral value of the tract from $6 an acre to $25 an acre. The total appraised value of the land was thus increased to $22,780.

On July 31, 1920, the Emahaka tract was sold at public auction, following notification of such sale, to one Walter Ferguson for $27,280. As stated by the Commission in its finding number 5, the notice of the sale and other evidence in the record indicates that the terms of sale were as follows:

"Terms: Twenty-five per cent of the purchase price must be paid on the date of sale, 25% in one year, and the balance in two years from date of sale; deferred installments to draw 5% interest, provided that the entire amount may be paid at any time before the expiration of one year, if so desired. Patent will be issued immediately upon full payment. Should any payment be not made when due, the sale thereof may be canceled and the rights of the purchaser therein declared forfeited, in the discretion of the Secretary of the Interior."

At the time of the sale Ferguson paid the required twenty-five percent of the purchase price, or $6,820. Under the terms of sale installment payments covering the balance of the purchase price, with accumulated interest, were due on July 31, 1921, and July 31, 1922. But no further payment on the tract was made by Ferguson even though Government officials repeatedly requested the amount remaining due. Cancellation of the sale for default was authorized under the terms of sale but the Government elected not to exercise that authority.

On November 28, 1922, Ferguson notified the Department of the Interior that he was transferring his interest in the Emahaka School tract to a V. V. Harris. On February 5, 1923, Harris paid the balance due, consisting of both principal and interest, under the July 31, 1920, sale of the land.⁴

A Principal Chief of the Seminole Nation was appointed by the United States to execute a deed conveying title to the Emahaka tract to Harris. The Principal Chief protested the sale, however, and refused to sign the patent. As stated in the protest, made on June 26, 1923, the Seminole Tribe had never agreed to the sale of the property; the purchaser had neglected the payments on the property and failed to carry out the terms of the purchase; the price received was inadequate; the property had great oil value and should be retained for the benefit of the Seminole Nation; and the purchaser who neglected payments on the property had intended not to comply with the terms of purchase, but, instead, was willing to let the property be returned to the Seminoles.

Thereafter Harris requested of the Commissioner of Indian Affairs that a patent to the Emahaka School tract be issued to him notwithstanding the protest by the Seminoles. This request was granted when on December 22, 1924, a patent was issued to Harris, signed by the Secretary of the Interior pursuant to Section 6 of the Act of April 26, 1906, 34 Stat. 137,⁵ and the Act of April 30, 1908, supra, but without the signature of the Principal Chief of the Seminole Nation.

Because the patent had not been signed by the Principal Chief of the Seminole Nation under the provisions of the Seminole Agreement, July 1, 1898, 30 Stat. 567, Harris experienced difficulties when he later tried to dispose of the land. Handicapped in this respect, he sought from the Interior Department a patent to the tract signed by the Principal Chief of the Seminole Nation. The Government appointed another Principal Chief to execute such a conveyance, but he too refused to sign a patent conveying title to Harris. The patent to V. V. Harris was never signed by the Principal Chief of the Seminole Nation.

On the record presented the Indian Claims Commission found that, following the sale to Ferguson on July 31, 1920, oil activity in the vicinity of the Emahaka School tract greatly increased, and so too did the value of the property for oil and gas. Commission finding number 7. The value of the tract, including surface and minerals, between July 31, 1920, and February 5, 1923, and December 22, 1924, was determined by the Commission to be $200 per acre.

Liability against the United States was found by the Commission in the Government's inattention to the Seminoles' continuous protests of the July 31, 1920, sale, protests directed not only to the sale itself but also to the extensions granted to the defaulting purchaser, and in the Government's refusal to consider the claimed increase in the mineral value of the land as a basis for canceling the 1920 sale. These circumstances indicated that the Government, in its failure to cancel the sale, was giving consideration solely to the treatment it thought should be extended the purchaser. In this manner of conduct, said the Commission, the Government failed to discharge its duty to the Seminoles. Commission finding number 13.

The measure of recovery allowed the Seminole Nation was the difference in the surface and mineral value of the land as found by the Commission, i. e., $200 per acre, or a total of $64,000, and the amount received, $29,786.34 — or a net sum of $34,213.66 subject to any allowable offset. The majority opinion of the Commission was written by Chief Commissioner Witt, in which Commissioner Holt concurred. A dissenting opinion was issued by Commissioner O'Marr. 4 Ind.Cl.Comm. 66.

A subsequent hearing was held before the Commission on the question of the Government's offsets. Findings of fact were made on that issue, and an opinion rendered holding that the Government was entitled to offsets in the amount of $160. 6 Ind.Cl.Comm. 336. Thereafter the Commission entered its conclusions of law and final award in favor of the Seminole Nation in the net amount of $34,053.66.

In its appeal to this court the Government initially questions the jurisdiction of the Indian Claims Commission to review the discretionary action of the Secretary of the Interior in this case, absent proof of fraud or capricious conduct on his part. The Government refers us to several decisions in support of this view. Cherokee Nation v. Hitchcock, 187 U.S. 294, 23 S.Ct. 115, 47 L.Ed. 183; Anicker v. Gunsburg, 246 U.S. 110, 38 S.Ct. 228, 62 L.Ed. 603; United States v. Wunderlich, 342 U.S. 98, 72 S.Ct. 154, 96 L.Ed. 113; United States v. Moorman, 338 U.S. 457, 461, 70 S.Ct. 288, 94 L.Ed. 256; In re Electric Power & Light Corp., 2 Cir., 176 F.2d 687; Wagner Whirler & Derrick Corp. v. United States, 121 F. Supp. 664, 128 Ct.Cl. 382, 385-386; Croghan v. United States, 89 F.Supp. 1002, 116 Ct.Cl. 577, 586, certiorari denied 340 U.S. 854, 71 S.Ct. 71, 95 L.Ed. 626; Mole Lake Band v. United States, 82 F.Supp. 342, 113 Ct.Cl. 16, 28.

The force of appellant's argument on this point is lost, however, in the circumstances which gave rise to the Indian Claims Commission Act of 1946, 60 Stat. 1049, 25 U.S.C.A. § 70 et seq., and in the extraordinary remedies created by that legislation. The peculiar nature of the early dealings between the Government and the Indians supplied the need for legislation such as found in the Indian Claims Commission Act. The act was designed to help erase certain evils of long standing.⁶ Congress' solution to the problem was unusual. For Section 2 of the act, which sets forth the type of claims to be heard and determined by the Indian Claims Commission,⁷ in part recognizes liability in the United States where none had existed before. In thus creating new causes of action Congress was exercising a political function.⁸

The Government's contention, if sustained, would deprive the act of much of its meaning. Under the act the Indian Claims Commission is given extremely broad jurisdiction to finally determine the many outstanding...