(271 F.)

UNITED STATES v. BOARD OF COM'RS OF MCINTOSH COUNTY.. SAME V. STUCKEY, County Treasurer. SAME v. RANSON,

County Treasurer.

(District Court, E. D. Oklahoma. March 19, 1921.)

Nos. 2594, 2621, 3184.

1. States 9-Irrevocable ordinance required by Enabling Act relating to government lands is binding.

The irrevocable ordinance inserted in the Constitution of Oklahoma and required by Enabling Act, § 3, par. 3, which disclaimed title to unappropriated public lands or lands held by Indians, is a continuing and binding obligation on the state after its admission into the Union, in so far as it may be a matter of federal cognizance.

2. Taxation 6-States cannot tax instrumentalities of federal government. The states cannot tax or otherwise impose burdens on the exclusive powers of the federal government or on its instrumentalities employed to carry such governmental powers into execution.

3. Taxation 18-Federal government cannot tax state instrumentalities. The national government cannot tax exclusive agencies of the states employed to carry their powers into execution except as such exemption may be modified by Const. U. S. Amend. 16, authorizing the income tax. 4. Taxation 181-Allotments to citizen Indians taxable, in absence of express restrictions.

Tribal lands allotted in severalty to Oklahoma Indians who were then citizens of the United States are subject to taxation by the state in the same manner as other lands, unless such allotment has been specifically or by express and clear implication exempted or reserved from taxation.

5. Taxation 181-Oklahoma Constitution, exempting Indian lands from taxation, applies only to existing exemptions.

Const. Okl. art. 10, § 6, exempting from taxation property exempt by reason of treaty stipulations existing between Indians and the government, or by federal laws during the force and effect of such treaties or laws, obviously exempts such lands only as were exempt under treaties and laws in existence when the state was admitted.

6. Taxation 181-Acts extending restrictions on alienation of Indian lands did not extend exemption from taxation to inherited lands.

Act April 26, 1906, § 19, providing that all Indian lands upon which restrictions on alienation are removed shall be subject to taxation, and that other lands shall be exempt from taxation so long as the title remained in the original allottee, and Act May 27, 1908, § 4, providing that lands from which restrictions on alienation have been or shall be removed shall be subject to taxation with a proviso that allotted lands should not be subjected to any claim against the allottees arising prior to the removal of restrictions, did not operate to extend the exemption from taxation to lands inherited from the original allottees by full-blood Indian heirs in cases where such exemption was not given by the several allotment acts relating to the different nations.

7. Constitutional law 48-Exemption of Indian lands from taxation construed to conform to Oklahoma Constitution.

Act May 27, 1908, § 4, relating to the exemption of Indian lands from taxation, which was enacted shortly after Oklahoma was admitted as a state, should not be construed so as to conflict with Const. Okl. art. 10, § 6, exempting only lands then exempt under existing laws, if as reasonable a construction can otherwise be reached.

For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes

8. Taxation 181-Lands purchased for Indians with proceeds from restricted lands not exempt.

Lands theretofore taxable, which were purchased for a Creek Indian by the Secretary of the Interior with the proceeds of oil royalties from restricted lands or of the sale of lands whose alienation was prohibited without the approval of the Secretary, the deeds to which purchased lands contained a clause declaring that no lease, deed, mortgage, power of attorney, contract of sale, or other instrument affecting the title thereto should be of any force without the approval of the Secretary of the Interior are not exempted from taxation by the state, by Act April 26, 1906, § 19, exempting Indian lands so long as the title remained in the original allottee, or Act May 27, 1908, § 4, exempting allotted lands from claims against allottees arising prior to the removal of restrictions on alienation, and also providing that such lands from which restrictions on alienation have been or shall be removed shall be subject to taxation.

9. Taxation 181-Oklahoma Enabling Act and Constitution do not exempt lands purchased for Indians.

.

The provisions of the Oklahoma Enabling Act and Constitution exempting from taxation property belonging to or thereafter purchased by the United States and all Indian property exempted by existing treaties or laws do not exempt from taxation lands theretofore taxable, after their purchase by the Secretary of the Interior for a full-blood Creek Indian, to be held under the same restrictions on alienation as were imposed on the lands from which the purchase price was derived as oil royalties or proceeds of sale.

Three separate suits by the United States against the Board of Commissioners of McIntosh County, against W. W. Stuckey, Treasurer of Tulsa County, and against J. P. Ranson, Treasurer of McIntosh County. Judgment rendered for defendant in each suit.

C. W. Miller, U. S. Atty., and L. K. Pounders, Sp. Asst. U. S. Atty., both of Muskogee, Okl.

N. A. Gibson and Jos. L. Hull, both of Muskogee, Okl., W. L. McPherson, of Eufaula, Okl., and W. R. Seaver, of Tulsa, Okl., for defendants.

WILLIAMS, District Judge. The following questions are involved in the above styled and numbered cause:

(1) Are lands theretofore taxable under the state laws, and afterwards purchased under the supervision of the Secretary of the Interior from their bona fide non-Indian owners with royalties accruing under such supervision to a full-blood Creek Indian from part of her restricted allotment, exempted or freed from state taxation by virtue of the clause inserted by the grantor in the deed to her under the direction of and at the instance of and requirement of the Secretary of the Interior, providing "that no lease, deed, mortgage, power of attorney, contract to sell, or other instrument affecting the land herein described or the title thereto, executed during the lifetime of said. grantee at any time prior to April 26, 1931, shall be of any force and effect or capable of confirmation or ratification, unless made with the consent of and approved by the Secretary of the Interior"; the conveyance being dated December 28, 1914, and prior to its delivery and recording the following certificate of the Secretary of the Interior being thereto annexed:

For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes

(271 F.)

"I hereby certify that the land described in the above deed was purchased for the said Ella Jones with funds held in trust by the United States for her benefit derived from oil royalty on leases covering lands allotted for her, restricted by virtue of her enrollment as a full-blood citizen of the Creek Nation,

** and that said purchase was made and said deed was executed and the same is hereby approved pursuant to the regulations prescribed by the Secretary of the Interior under Act of Congress approved May 27, 1908, and the Act approved August 1, 1914."

(2) Are lands theretofore taxable under state statutes, and afterwards purchased under the supervision of the Secretary of the Interior from their non-Indian bona fide owners with funds accruing under his supervision to a full-blood Creek Indian as a part of the proceeds of the sale of the lands allotted and patented to her as a part of her allotment and restricted, so as to be inalienable without the consent of the Secretary of the Interior, prior to December 1, 1913, which were sold by her subject to the conditions, inserted under the direction and at the instance of the Secretary of the Interior in the deed from the grantors to her, that the purchase price paid there for should be received by the Secretary of the Interior or his agents and by him held in trust as a trust fund and by him disbursed under the laws, rules, and regulations of the Secretary of the Interior for her benefit, the conveyances by which said lands thus acquired containing a clause inserted by the grantor under the direction of, and at the instance of and by said requirement of the Secretary of the Interior, provided "that no lease, deed, mortgage, power of attorney, contract to sell, or other instrument affecting the land herein described or the title thereto, executed during the lifetime of said grantee at any time prior to April 26, 1931, shall be of any force and effect or capable of confirmation or ratification unless made with the consent and approval of the Secretary of the Interior," and prior to its delivery and recording the following certificate of the Secretary of the Interior being thereto annexed:

with funds

"That the land described in the above deed purchased for derived from the sale of lands allotted to on the final approved rolls of citizens by blood of that nation, and that said purchase was made and said deed approved pursuant to the Act of Congress of May 27, 1908, which authorized the Secretary of the Interior to remove restrictions from allotted lands of the Five Civilized Tribes 'wholly or in part, under such rules and regulations concerning terms of sale and Disposal of the Proceeds for the benefit of the respective Indians as he may prescribe' "

-thereby exempted or rendered free from state taxation?

[1] The people inhabiting the proposed state of Oklahoma, by the terms of paragraph 3 of section 3 of the Enabling Act (34 Stat. 267) were by irrevocable ordinance required to

"agree and declare that they forever disclaim all right and title in or to any unappropriated public lands lying within the boundaries thereof, and to all lands lying within said limits owned or held by any Indian, tribe, or nation, and that until the title to any such public land shall have been extinguished by the United States, the same shall be and remain subject to the jurisdiction, disposal, and control of the United States; that land belonging to citizens of the United States residing without the limits of said State shall never be taxed at a higher rate than the land belonging to residents

thereof; that no taxes shall be imposed by the State on lands or property belonging to or which may hereafter be purchased by the United States or reserved for its use." (Italics mine.)

To the foregoing mandatory conditions the people of the proposed state, through their constitutional convention, by irrevocable ordinance agreed. A similar requirement has been imposed upon every state, except Vermont, Kentucky, Tennessee, Maine, and Texas, preliminary' to admission into the Union. In so far as it may be a matter of federal cognizance, the same became a continuing and binding obligation on the part of the state after its admission into the Union. Coyle v. Smith, 221 U. S. 559, 31 Sup. Ct. 688, 55 L. Ed. 853; Id., 28 Okl. 121, 113 Pac. 944; Joplin Mercantile Co. v. U. S., 236 U. S. at page 547, 35 Sup. 291, 59 L. Ed. 705.

Section 1 of said Enabling Act contained the following proviso:

"Provided, that nothing contained in the said Constitution shall be construed to limit or impair the rights of persons or property pertaining to the Indians of said Territories (so long as such rights shall remain unextinguished) or to limit or affect the authority of the government of the United States to make any law or regulation respecting such Indians, their lands, property, or other rights by treaties, agreement, law, or otherwise, which it would have been competent to make if this Act had never been passed." (Italics mine.)

Said provision was not required to be accepted by irrevocable ordinance, such being not essential, as it related to a matter within the exclusive control of the Congress and so continues, unless remitted by the Congress to the state authority. Tiger v. Western Inv. Co., 221 U. S. at page 309, 31 Sup. Ct. 578, 55 L. Ed. 738. Said provision of section 3 of the Enabling Act was also in substance incorporated in section 3 of article 1 of the Constitution of the state.

[2, 3] That the states cannot tax or otherwise impose burdens on the exclusive powers of the federal government or its instrumentalities employed to carry such governmental powers into execution is beyond question. The same limitation rests upon the national government as to exclusive agencies of the states unless modified by the Sixteenth Amendment as to taxation which relates to incomes. Weston v. Charleston, 2 Pet. 449, 7 L. Ed. 481; McCulloch v. Maryland, 4 Wheat. 316, 431, 439, 4 L. Ed. 579; Bank of Commerce v. New York City, 2 Black. 620; Collector v. Day, 11 Wall. 113, 124, 20 L. Ed. 122; United States v. Railroad Co., 17 Wall. 322, 21 L. Ed. 597; Railroad Co. v. Peniston, 18 Wall. 5, 21 L. Ed. 787; Knowlton v. Moore, 178 U. S. 59, 20 Sup. Ct. 747, 44 L. Ed. 969.

Beginning with Ohio, it has been customary for the federal government, in admitting the new states into the Union, "to require from that state-though without necessity-a stipulation that the public domain lying within its limits shall not be taxed by the state." Cooley on Taxation, vol. 1 (3d Ed.) p. 135. The Ohio Enabling Act (Act April 30, 1802) provides that:

shall be and

"Every and each tract of land sold by Congress remain exempt from any tax laid by order or under the authority of the State for the term of five years from and after the day of sale."

(271 F.)

The Louisiana Enabling Act (Act Feb. 20, 1811), in addition, required an agreement on the part of the state, by irrevocable ordinance, that the people—

"agree and declare that they forever disclaim all right or title to the waste or unappropriated lands lying within the said territory, and that the same shall be and remain at the sole and entire disposition of the United States," and that "the lands belonging to citizens of the United States residing without the said state shall never be taxed higher than the lands belonging to persons residing therein."

The Illinois Enabling Act (Act April 18, 1818), in addition, required an agreement, by irrevocable ordinance, that the

"bounty lands granted, or hereafter to be granted, for military services during the late war, shall, while they continue to be held by the patentees, or their heirs, remain exempt, as aforesaid, from all taxes, for the term of three years."

The Iowa Enabling Act (Act March 3, 1845), in addition, required that—

"the said State shall never interfere with the primary disposal of the soil within the same by the United States nor with any regulations Congress may find necessary for securing the title in such soil to the bona fide purchasers thereof; and that no tax shall be imposed on lands the property of the United States," and that "the bounty lands granted, or hereafter to be granted, for military services during the late war, shall, while they continue to be held by the patentees or their heirs, remain exempt from any tax laid by order or under the authority of the state for the term of three years."

The Nevada Enabling Act (Act March 21, 1864), in addition to the foregoing provided that

"No taxes shall be imposed by said State on lands or property therein be longing to, or which may hereafter be purchased by, the United States."

The Enabling Act for the Dakotas, Montana, and Washington (section 4) seems to be a prototype of that of Oklahoma and contains substantially the same provisions.

When the original thirteen colonies obtained their independence from the king of England, each succeeded to the unappropriated public lands within its boundaries, the same prior to that time having been the property of the crown. Clark v. Smith, 13 Pet. 195, 10 L. Ed. 138; Johnson v. McIntosh, 8 Wheat. 543, 5 L. Ed. 681; Pollard's Lessee v. Hagan, 3 How. 212, 11 L. Ed. 565; Shively v. Bowlby, 152 U. S. 1, 14 Sup. Ct. 548, 38 L. Ed. 331; De Weese v. Reinhard, 165 U. S. 386, 17 Sup. Ct. 340, 41 L. Ed. 757.

Vermont succeeded to all the rights of the crown to the unappropriated public lands. Town of Pawlet v. Clark, 13 U. S. (9 Cranch) 292, 3 L. Ed. 735.

Kentucky, which was originally a part of Virginia, succeeded to such unappropriated public lands. Colson v. Lewis, 15 U. S. (2 Wheat.) 377, 4 L. Ed. 266; Boone and Talbot v. Helm, 34 Ky. (4 Dana) 403; Rollins v. Clark, 38 Ky. (8 Dana) 15.

Maine being erected out of the territory of Massachusetts by virtue of act of Massachusetts Legislature of June 19, 1819 (St. 1819, c.