Whitebird v. Eagle-Picher Lead Co.

• Decision Date: 10 September 1928
• Docket Number: No. 178.,178.
• Parties: WHITEBIRD et al. v. EAGLE-PICHER LEAD CO. et al.
• Court: U.S. District Court — Northern District of Oklahoma

28 F.2d 200 (1928)

WHITEBIRD et al. v. EAGLE-PICHER LEAD CO. et al.

No. 178.

District Court, N. D. Oklahoma.

September 10, 1928.

Ames, Lowe & Cochran, of Oklahoma City, Okl., and Whipple & Rosenbloom, of Okmulgee, Okl., for plaintiffs.

Squire, Sanders & Dempsey and Atlee Pomerene, all of Cleveland, Ohio, A. E. Spencer, of Joplin, Mo., and A. C. Wallace, Vern E. Thompson, and Ray McNaughton, all of Miami, Okl., for defendants.

KENNAMER, District Judge.

This is an action to cancel mining leases covering the allotments of Eudora Whitebird, Mary Whitebird, and Joseph Whitebird, deceased Quapaw allottees, and for an accounting as to the ores taken from the allotments of lands by the defendants, operating mines upon the lands under the leases sought to be canceled, and for judgment for the value of the ores so taken, alleged to aggregate millions of dollars.

It was established that pursuant to the Act of Congress approved June 7, 1897 (30 Stat. 62), on the 30th day of July, 1912, Mary Whitebird and the heirs of Eudora Whitebird and Joseph Whitebird, executed mining leases to one George W. Beck, Jr., covering the three allotments of Quapaw Indian lands. The leases were for a term of 10 years, and were executed for the purpose of affording the lessee the privilege of prospecting and mining for lead, zinc, and other minerals, providing for the payment of a royalty of 5 per cent. of the market value of the ore to be paid to the lessors. It was further developed that Beck subleased the Eudora Whitebird and Joseph Whitebird allotments to S. C. Fullerton, at a royalty of 10 per cent.; that Fullerton subleased to the Eagle-Picher Lead Company at a royalty of 12½ per cent.; that thereafter the Eagle-Picher Company subleased portions and parcels of the lands to various sublessees at royalties of 17½ per cent.; that Beck subleased the Mary Whitebird allotment to Fullerton for a royalty of 10 per cent., who in turn subleased it to the Eagle-Picher Company at a royalty of 12½ per cent., and that the Eagle-Picher Company subleased portions thereof to various sublessees at royalties of 17½ per cent.

The evidence discloses that the lands were mined by the Eagle-Picher Lead Company and its sublessees, together with other lands in the vicinity, until the year 1920, about two years prior to the expiration of the terms of the original leases, when the Eagle-Picher Company and 22 of its sublessees entered into an agreement respecting their activities and conduct for the procuring of new leases from the Indian owners of the lands. It is alleged in the bill of complaint that the purpose of the agreement was to render possible the obtaining of the leases from the Indian land owners without competitive bidding. However the evidence adduced on the trial of the case discloses that in January, 1921, the Eagle-Picher Lead Company, S. C. Fullerton, George W. Beck, Jr., and W. W. Dodson obtained new leases from the Indian owners on the three allotments involved in the action, providing for a royalty of 7½ per cent., which leases were submitted to the Secretary of the Interior for approval; that briefs were presented to the Secretary supporting arguments in favor of approval of the leases, but that the Secretary of the Interior refused to approve them because of the want of adequate and reasonable royalty. It was further developed that after such negotiations, and after bids had been submitted by various persons for leases upon the lands involved herein, Fullerton and Beck became competitive bidders for the leases to the Eagle-Picher Company, and thereafter the Secretary of the Interior referred the matter of ascertaining the situation with reference to the making of leases upon the lands to a commission and assigned to the commission to aid them an engineer from the Bureau of Mines.

A report was submitted by the engineer and the commission. The report of the engineer contains a lengthy detailed statement of the conditions in the Quapaw mining district — a review of the different methods of mining, so as to conserve the mines, the necessity for proper drainage, marketing of the ore, adequate mining machinery, and many other items necessary to a profitable operation of the mines to the lessors and lessees. This report included a consideration of the various bids, and in pursuance of the recommendations contained therein the leases were awarded to the Eagle-Picher Lead Company at a royalty of 10 per cent. The report in full may be found in the office of the clerk of this court.

On July 27, 1922, the Secretary of the Interior approved the form of lease to be executed pursuant to the award made to the Eagle-Picher Company, and transmitted it to the Superintendent of the Quapaw Indian Agency at Miami, Oklahoma, with instructions to have the same executed by the Indian owners, the complainants in this action. The Indian owners appeared before the Superintendent at Miami, and refused to execute the leases awarded and approved by the Secretary of the Interior, and filed a written protest against the execution of the leases. The written protest was predicated upon the ground that a royalty of 10 per cent. was insufficient, and that a higher royalty could be obtained from other bidders. Under orders of the Secretary of the Interior the leases awarded to the Eagle-Picher Lead Company were executed by O. K. Chandler, Superintendent of the Quapaw Agency, on behalf of the Indian owners.

The pleadings and the evidence introduced present two questions for determination. They are, first, are the leases held by the defendants upon the lands involved in the action invalid by reason of fraud alleged in the awarding the leases to the Eagle-Picher Company over the protests of the Indian owners; and, second, are the leases invalid for want of authority in the Secretary of the Interior to obtain the execution of the leases by the Superintendent of the Quapaw Agency for and on behalf of the Indian owners?

As to the alleged fraud, from a consideration of the evidence and arguments, I am of the opinion that the charge of fraud is not established by complainants. At the trial of the cause, a vast amount of documentary evidence was introduced, as well as the testimony of numerous witnesses. Two of the complainants in the action, Flora Whitebird and Antoine Greenback, stated to the court during the course of the trial, that they did not want the case prosecuted; other complainants stated that they desired that the case go on. There is no evidence of fraud upon the part of the Secretary of the Interior; nor is there evidence of any fraudulent conduct by the Eagle-Picher Lead Company. The evidence concerning the awarding of the leases establishes fairness and a desire upon the part of the Secretary of the Interior to protect the properties and rights of the Indian owners. The fact that an award was made for a 10 per cent. royalty, when bids had been submitted for higher royalties, is insufficient to establish fraud, especially in view of the report of the engineer from the Bureau of Mines and the committee that investigated and analysed the situation. From an observation of the complainants, incompetent Quapaw Indians, as they appeared and testified in court, it is obvious that they are subject to the influence of the white man, and by reason thereof, may easily be imposed upon. Their condition of dependence and inferiority is the justification for the Congressional Act of March 3, 1921. 41 Stat. 1225. By the terms of the act, the complainants, as well as other Quapaw Indians, were declared incompetent to manage and control the lands allotted to them, and the period of restriction was extended upon the alienation of their lands for 25 years. The evidence introduced established that the Eagle-Picher Company, and its sublessees, being lessees in possession, have made valuable improvements for the proper operation of the mines located upon the lands involved herein, and have expended large sums of money in the development of the properties, and that by reason thereof, were shown a preference in the awarding of the leases, but such a preference in view of the circumstances, does not constitute fraud. On the contrary, the evidence is convincing that the leases were fair in terms, and have been very profitable to the lessors, as well as to the lessees. In my opinion, complainants have failed to establish an abuse of discretion on the part of the Secretary of the Interior in the award to the Eagle-Picher Company, for the conduct of the persons competing with the Eagle-Picher Company in submitting bids for higher or larger royalties, the report of the committee, and the engineer from the Bureau of Mines, were considerations of much significance. I am convinced that the charge of fraud has not been sustained.

The other question for determination is whether the leases are valid, having been executed at the direction of the Secretary of the Interior, by the Superintendent of the Quapaw Indian Agency, for the Indian owners upon their refusal to execute after the leases had been awarded to the Eagle-Picher Lead Company. If the leases are to be sustained, there must be statutory authority for the execution of them in the manner in which they have been executed. In other words, Congress, in the exercise of its guardianship and control over restricted Indians, must have, by appropriate legislation, provided for the execution of leases by the Department of the Interior for incompetent Indians, and there must be compliance with the congressional acts, as a prerequisite to the validity of them. A consideration of Acts of Congress touching upon and governing the Quapaw Indians is of much interest and enlightenment, although Act March 3, 1921, § 26 (41 Stat. 1225-1248), is perhaps controlling of the question presented herein.

Under the Treaty of May 13, 1833 (7 Stat. 424), made between the United States and the Quapaw Indians, the United States agreed to convey to the Quapaw...