Ute Indian Tribe of Uintah & Ouray Reservation v. Probst

• Decision Date: 05 June 1970
• Docket Number: 126-69.,No. 125-69,125-69
• Citation: 428 F.2d 491
• Parties: UTE INDIAN TRIBE OF the UINTAH AND OURAY RESERVATION, a body politic and corporate of the United States of America, Plaintiff-Appellant, v. Parley PROBST and Oranna B. Moosman, Administratrix of the Estate of Elizabeth C. Bumgarner Poowegup, Deceased, Defendants-Appellees. UTE INDIAN TRIBE OF the UINTAH AND OURAY RESERVATION, a body politic and corporate of the United States of America, Plaintiff-Appellee, v. Parley PROBST, Defendant-Appellant, and Oranna B. Moosman, Administratrix of the Estate of Elizabeth C. Bumgarner Poowegup, Deceased, Defendant-Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

428 F.2d 491 (1970)

UTE INDIAN TRIBE OF the UINTAH AND OURAY RESERVATION, a body politic and corporate of the United States of America, Plaintiff-Appellant, v. Parley PROBST and Oranna B. Moosman, Administratrix of the Estate of Elizabeth C. Bumgarner Poowegup, Deceased, Defendants-Appellees.

UTE INDIAN TRIBE OF the UINTAH AND OURAY RESERVATION, a body politic and corporate of the United States of America, Plaintiff-Appellee, v. Parley PROBST, Defendant-Appellant, and Oranna B. Moosman, Administratrix of the Estate of Elizabeth C. Bumgarner Poowegup, Deceased, Defendant-Appellee.

Nos. 125-69, 126-69.

United States Court of Appeals, Tenth Circuit.

April 20, 1970.

Rehearing Denied June 5, 1970.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

John S. Boyden, Salt Lake City, Utah (Stephen G. Boyden, Salt Lake City, Utah, on the brief), for Ute Indian Tribe, appellant in No. 125-69 and appellee in No. 126-69.

Wayne L. Black, Salt Lake City, Utah (Robert D. Moore, Salt Lake City, Utah, on the brief), for Parley Probst, appellee in No. 125-69 and appellant in No. 126-69.

James J. Smedley, Heber, Utah (David Sam, Duchesne, Utah, on the brief), for Oranna B. Moosman, appellee in both Nos. 125-69 and 126-69.

Before MURRAH, Chief Judge, and BREITENSTEIN and HICKEY, Circuit Judges.

BREITENSTEIN, Circuit Judge.

We have here a three-way fight over Indian land. Plaintiff-appellant Ute Indian Tribe sued for certain equitable relief and for cancellation of a deed given by defendant-appellee Oranna Moosman as administratrix of the estate of Elizabeth Bumgarner Poowegup to defendant-appellant Parley Probst. Jurisdiction lies under 28 U.S.C. § 1362 because the matter in controversy arises under the Act of August 27, 1954, 25 U.S.C. § 677 et seq. The answer of Probst asserts the validity of the deed and counterclaims for damages. The administratrix denies that the Tribe has any right to the land and, by way of cross-claim against Probst, asserts that the deed to him is void. The district court held that the administratrix was entitled to the land. Both the Tribe and Probst appeal.

The Act provides for the division of the assets of the Tribe between the full-blood and mixed-blood groups, the termination of federal supervision over the latter, and the development of a program for such termination over the former. After the division of the assets between the two groups, the mixed-bloods were to devise a plan for the distribution of its assets among its members. 25 U.S.C. § 677l. If a majority of the mixed-blood group decided that partition of any land was impracticable and, if the Secretary of the Interior approved, the land could be sold and the proceeds divided among members of the group. 25 U.S.C. § 677l (5). Before the termination of federal supervision, a mixed-blood could dispose of his interest in acquired tribal property only with the approval of the Secretary. See 25 U.S.C. § 677n and 25 CFR § 243.3 (1966 ed.).¹ Federal supervision over tribal land terminated when a patent issued thereto. 25 CFR § 243.2(h). Until August 27, 1964, a patent conveying any tribal land to a mixed-blood had to provide that until that date members of the Tribe had the right of first refusal of an offer to sell. 25 U.S.C. § 677n and 25 CFR § 243.4.

In the division between the groups, the mixed-bloods received the 3,200 acres of land in question. They decided that partition was impracticable and that the land should be sold. It was appraised at $26,600. Secretarial approval is conceded.

Elizabeth, a mixed-blood, submitted the high bid of $26,016 for the land. She did not have the necessary money and interested Probst, a non-Indian, in the land. A written contract was prepared and executed on October 28, 1959, whereby Elizabeth sold to Probst for $35,000 and Probst went into immediate possession. The contract recognized that no patent had been issued and that Elizabeth would have to comply with the first-refusal provision of the statute. Elizabeth gave Probst a $35,000 mortgage on the land to assure compliance with the contract terms. The mortgage was duly recorded. Neither the contract nor the mortgage was submitted to the Secretary for his approval.

On August 11, 1960, the Secretary promulgated regulations as authorized by the Act. 25 U.S.C. § 677z. See 25 CFR §§ 243.1-243.12 (1966 ed.). A patent was issued to Elizabeth on September 20, 1960. It contained the first-refusal provisions required by the statute and regulations. On November 11, 1960, Elizabeth and Probst executed an amendment to the October 28, 1959, contract. It provided that certain escrowed funds be released to Elizabeth; that the required offering should not be made "until such time as the Party of the First Part Probst requests that the same be made"; and that if such offering was made at Probst's request certain conditions for his protection should be included within the offer.

Elizabeth was killed in an accident on November 27, 1963, without making the offer and without conveying to Probst. Oranna was appointed administratrix of Elizabeth's estate. Probst filed a creditor's claim against the estate on the basis of the 1959 sale contract and mortgage. Pursuant to court order, the administratrix conveyed the land to Probst by a September 21, 1964, deed which was recorded on October 5, 1964. The pending suit was brought by the Tribe on September 20, 1967.

The trial court held that Probst was guilty of fraud; that Elizabeth was not in pari delicto; that the first-refusal provisions "were as much or more for the protection of the Indian owner as for the protection of the members of the Tribe"; that public policy favored the Indian owner; that the impossibility of reconstructing what would have occurred had there been an offering by Elizabeth and the increase in value of the property supported the award of the land to the administratrix; and that she was not barred by any statute of limitations, by laches, or by estoppel.

The construction and application of § 677n is decisive. The land was a tribal asset. It was real property as that term is used in the section because it was acquired by a mixed-blood. See definition of "real property" in 25 CFR § 243.2 (g). The patent to Elizabeth contained the first-refusal provision. Neither she nor her administratrix made the required offer. The question is the effect of such non-action.

The arguments of the parties lead us into many by-paths which need not be traveled. The Act was intended to distribute tribal property and terminate federal supervision over the mixed-bloods. See § 677 and House Report No. 2493, 2 U.S.Code Cong. & Admin.News '54, pp. 3355-3359. We are aware of no legislative history which illuminates the intent of the first-refusal provisions. The reliance of the Tribe and the administratrix on the provision of § 677i that a contract made in violation of that section shall be null and void is misplaced. As we read that section it applies to undivided interests and not to real property which a mixed-blood has acquired by purchase. Our concern is whether the statute confers upon the Tribe the unconditional right to meet the price at which the selling mixed-blood offers land acquired from tribal assets.

Contrary to the trial court, we believe that Congress, by incorporating § 677n into the Act, had in mind primarily the protection of the Tribe and only secondarily, if at all, the protection of the selling mixed-blood. The first-refusal provision gave the Tribe, for a ten-year period, the opportunity to recover land which it had lost by the division of assets between the two groups. The language of § 677n means that Congress believed it preferable that tribal land acquired by a mixed-blood, who determined to sell before 1964, return to the Tribe if the Tribe wanted it and could match the offering price. This procedure does not assure a higher price to the mixed-blood, because the Tribe is required only to meet the offering price. Only in the event two or more members of the Tribe compete for acquisition of the land does bidding take place. 25 CFR § 243.7.

The statute must be construed and applied to effectuate the congressional intent. United States v. American Trucking Associations, Inc., 310 U.S. 534, 542, 60 S.Ct. 1059, 84 L.Ed. 1345; see also Federal Trade Commission v. Fred Meyer, Inc., 390 U.S. 341, 348-352, 88 S.Ct. 904, 19 L.Ed.2d 1222. We believe that when a mixed-blood determined within the ten-year period to dispose of his acquired interest, the Tribe had the right to have the property offered to it in accordance with the statute and regulations. Elizabeth determined to sell the land at or before the time when she entered into the first contract with Probst. She did not offer the land to the Tribe. Her administratrix in turn did not offer it, but instead waited until the expiration of the ten-year period and then gave Probst a deed. The Tribe was thus deprived of its statutory right. It makes no difference whether this result was intentional or unintentional or whether it was the upshot of a fraudulent scheme, good-faith ignorance, or ineptness. Whatever the reason, the inescapable fact is that the Tribe was not given the opportunity to reacquire the land.

Probst argues that the assertion of this right is barred by the Utah statute of limitations, Utah Code Ann. 1953, § 78-12-26(3), which provides that a fraud action must be brought within three years after the discovery by the aggrieved party of the fraudulent act. Holmberg v. Armbrecht, 327 U.S. 392, 395-397, 66 S.Ct. 582, 90 L.Ed. 743, holds that a suit in a federal court to enforce in equity a federally created right is not controlled by the forum statute of limitations. The Tribe seeks in federal court equitable relief from the denial of a federal statutory right. There is no applicable federal statute of limitations. Under Holmberg the state statute does not apply and the question is whether the Tribe is chargeable with laches.

The...