Anicker v. Gunsburg/Opinion of the Court

This is a contest between holders of oil and gas leases made by one Eastman Richard, a full-blood Creek Indian, the owner by patent of the west half of the northeast quarter of section 5 of township 17 N., range 7 E., in Creek County, Oklahoma. Richard made a lease of the west one-half of the quarter to David Gunsburg and the Southwestern Petroleum Company on March 20, 1912. This lease was not filed for record with the Indian Agency until April 5, 1912, nor was it recorded with the Register of Deeds for Creek County, Oklahoma. On March 28, 1912, Richards made a like lease for the same premises to the appellant, William J. Anicker, which was filed with the Indian Agency on March 30, 1912, and on April 1, 1912, was filed for record with the Register of Deeds for Creek County, Oklahoma. It thus appears that the lease to Gunsburg and the Southwestern Petroleum Company was earlier than the one to Anicker but the latter was first recorded. Upon hearing upon these conflicting leases the United States Indian Superintendent recommended the approval of the Gunsburg and Southwestern Petroleum Company lease.

After referring to the dates of the leases and the time of filing the same for record, the superintendent said:

'The Department has uniformly held in such cases that where a     lease is filed, with the papers necessary for completion of      same, within thirty days, that the date of execution is the      date from which the priority of the lease is determined.

'To my mind this is the only reasonable construction of the     regulations, so long as thirty days or any other period is      allowed within which to file a lease. But it is contended on     behalf of Mr. Anicker that the lease to Gunsburg and the      Southwestern Petroleum Company was obtained by fraud. To this     contention I cannot agree for the reason that this lease and      the lease to Messrs. Funk & Riter were presented to this      office on the date of execution, fully explained by Mr. William Kremer, Asst. Chief Clerk, a notary in this office,     and acknowledged by the lessor. This contention the attorneys     for Mr. Anicker were unable to support in their      cross-examination of Eastman Richard, although it was      apparent at that time that the lessor did not remember the      names of the lessees. He was however, confident that he had      leased his entire allotment at that time, and it appears from      Mr. Kremer's testimony, May 14, 1912, page 23, that the lease      was fully explained to the lessor, as is done in all cases      where leases are acknowledged before a notary in the employ      of this office, and considering the numerous declarations and      affidavits submitted bearing the lessor's signature in      connection with this case, showing a change of attitude upon every occasion approached in connection with these      leases, and his lack of business ability, I am not inclined      to entertain any doubt as to the fact that the lease was      fully explained to him upon the date of execution thereof,      notwithstanding his uncertainty at the hearing on May 13th      and 14th as to the name of the lessee.

'It is further contended, in behalf of Mr. Anicker, that he     should be considered prior lessee for the reason that his      lease was made prior to the time the lease of Gunsburg and      the Southwestern Petroleum Company was filed at the Union      Agency or elsewhere, and that the same was not only filed in      the county wherein the land is situate, but also filed at      Union Agency at a date prior to the date upon which the lease      to Gunsburg and the Southwestern Petroleum Company was      received.

'It is also contended that he had no actual notice, and an     attempt has been made to show that the lessor had conveyed      the idea to Mr. Anicker or his agent that the only lease he      had executed when approached by Mr. Anicker, was the lease in      favor of the Eastern Oil Company. It will be noted in the     testimony that an unsuccessful effort was made to secure an      admission from Eastman Richard that would corroborate this      contention.

'For the purposes of this case I do not consider it necessary     to determine at this time whether or not the evidence at hand      shows that such representations were made by the lessor; even      admitting that the lessee was misled by the lessor, the      regulations which provide thirty days within which a lease      may be filed, if binding upon parties interested in securing      leases, should be considered as heretofore, as giving that      lease priority which bears the prior date of execution and is      filed with the papers required, within the 30-day period.

'An examination of the lease to David Gunsburg and the     Southwestern Petroleum Company discloses the fact that this      lease was filed within thirty days, in accordance with the regulations, and that the same was executed prior to      the lease in favor of Mr. Anicker. Concerning the contention     of Mr. Anicker that the date of filing should be regarded as      the date of priority, which carries with it the contention      that the regulations of the Secretary of the Interior      allowing thirty days within which to fild a lease is not      within the power conferred on the Secretary of the Interior,      under the law, which provides in part (section 2, Act of      Congress of May 27, 1908 [35 Stat. L. 312]): 'That leases of      restricted lands for oil and gas mining purposes *  *  * may be      made with the approval of the Secretary of the Interior under      rules and regulations provided by the Secretary of the      Interior and not otherwise."

After upholding the right of the Secretary of the Interior to make rules and regulations the superintendent further said:

'The Secretary clearly having the right to fix a reasonable     period within which time lessees may and must file their      leases for approval, it follows that if such a regulation is      made all lessees must receive the same treatment, both as to      the benefits or privileges of taking the time allowed, or on      the contrary the penalty, if they fail to comply with the      regulation. If this policy was not followed, the rule might     as well be abolished, but this would lead to many      opportunities of double dealing on behalf of both lessees and      lessors. It being almost a physical impossibility to execute,     complete the papers and file leases simultaneously, a      reasonable time must be given. The thirty-day rule has been     in effect since the early days of oil lease development in      the Five Tribes  nd persons taking leases almost universally      understand that the date of the lease, if filed within the      thirty-day period, governs, instead of the date of filing.

*    *     *

'The lease of Mr. Anicker must also be disapproved not because he was in any way delinquent himself, but because     of the prior lease of David Gunsburg and the Southwestern      Petroleum Company filed with all papers required within even      a shorter period than that allowed by the Department.'

The superintendent concluded that the lease in favor of Anicker should be disapproved, and the lease to Gunsburg and Southwestern Petroleum Company should be approved.

Upon hearing before the First Assistant Secretary of the Interior that officer reached a like conclusion. A motion to reconsider was denied, the Secretary concluding:

'If there were any advantage in the prior filing of a lease     which was entered into and executed after another lease, both      having been filed at the agency within the time required by      regulation, Anicker would have had that advantage. The Act of     March 1, 1907 (34 Stat. 1026), makes the filing at Union      Agency legal notice. Anicker's lease is stamped as filed at     the Agency March 30, 1912. Until approved by the Secretary,     it was not a completed instrument and the fact of its having      been recorded in a county office cannot estop the Secretary      from finding that another lease regularly executed and filed      is more for the allottee's interest and better entitled to      approval.'

The plaintiff's bill was filed upon the theory that the lease to Gunsburg and Southwestern Petroleum Company had been approved by the Secretary by mistake of law, and that, but for the mistake, the lease of plaintiff in error would have been approved, and the bill sought to charge the defendants in error as trustees for the complainant, and to require an assignment of the lease to him. The District Court held against complainant, and that decree was affirmed by the Circuit Court of Appeals, 226 Fed. 176, 141 C. C. A. 174.

In order to maintain a suit of this sort the complainant must establish not only that the action of the Secretary was wrong in approving the other lease, but that the complainant was himself entitled to an approval of his lease, and that it was refused to him because of an erroneous ruling of law by the Secretary. Bohall v. Dilla, 114 U.S. 47, 5 Sup. Ct. 782, 29 L. Ed. 61.

Section 20 of the Act of April 26, 1906, 34 Stat. 145, c. 1876:

'All leases and rental contracts, except leases and rental     contracts for not exceeding one year, for agricultural      purposes, for lands other than homesteads, of full-blood      allottees of the Choctaw, Chickasaw, Cherokee, Creek and      Seminole Tribes shall be in writing, and subject to approval      by the Secretary of the Interior, and shall be absolutely      void and of no effect without such approval: *  *  * Provided,      *  *  * that all leases entered into for a period of more than      one year, shall be recorded in conformity to the law      applicable to recording instruments now in force in said      Indian Territory.'

Section 2 of the Act of May 27, 1908, 35 Stat. 312, c. 199:

'That leases of restricted lands for oil, gas or other mining     purposes, *  *  * may be made, with the approval of the      Secretary of the Interior, under rules and regulations      provided by the Secretary of the Interior, and not      otherwise.'

The Act of March 1, 1907, 34 Stat. at Large, 1026, c. 2285:

'The filing heretofore or hereafter of any lease in the     office of the United States Indian Agent, Union Agency,      Muskogee, Indian Territory, shall be deemed constructive      notice.'

Under the authority to make rules the Secretary of the Interior provided:

'All leases shall be in quadruplicate, and, with the papers     required, shall be filed within thirty days from and after      the date of execution by the lessor with the United States      Indian Agent at Union Agency, Muskogee, Oklahoma.'

Whatever may be the effect of this rule providing for the filin of leases within thirty days from and after their execution, in view of the requirements of the statutes, the lease can have no validity without the Secretary's approval. The protection of the Indian's rights is left to the Indian Bureau of which the Secretary is the head, and the courts may only interfere to protect the rights of others when they are invaded by clearly unauthorized action.

Much stress is placed in argument upon the provisions of section 20 of the Act of April 26, 1906, requiring leases entered into for a period of more than one year to be recorded in conformity with the law requiring the recording of conveyances in force in the Territory; and upon the Act of March 1, 1907, providing that the filing of the lease in the office of the Indian Agency shall be deemed constructive notice. An elaborate argument is based on these requirements, and the statutes of Arkansas in force in the Territory are set out in the brief, which, it is contended, show the necessity of recording such instruments in order to give constructive notice to persons dealing with the title. But these requirements do not relieve the appellant of the primary difficulty of maintaining this suit; the lack of a showing that his lease would have been approved but for a mistake of law which resulted in the approval of the lease to another.

The statute is plain in its provisions-that no lease, of the character here in question, can be valid without the approval of the Secretary. Such approval rests in the exercise of his discretion; unquestionably this authority was given to him for the protection of Indians against their own improvidence and the designs of those who would obtain their property for inadequate compensation. It is also true that the law does not vest arbitrary authority in the Secretary of the Interior. But it does give him power to consider the advantages and disadvantages of the lease presented for his action, and to grant or withhold approval as his judgment may dictate.

There is nothing in this record to show that approval of the appellant's lease has been given by the Secretary as required by the statute. On the contrary, it appears that the Secretary approved another lease of the same land, and has withheld his approval of the one under which the appellant claims. The Secretary declares in substance in the finding which we have quoted, being his final action in the case, that the prior recording of one lease does not abridge his authority to find that another lease, regularly executed and filed, is more to the allottee's interest and better entitled to approval. It does not appear that had he disapproved the Gunsburg lease, he would have approved the one to appellant, and until this affirmatively appears, he has no standing which permits a court by its decree to award the leasehold to him.

We find nothing in this record to indicate that the Secretary of the Interior has exceeded the authority which the law vests in him. The fact that he has given reasons in the discussion of the case, which might not in all respects meet with approval, does not deprive him of authority to exercise the discretionary power with which by statute he is invested. United States ex rel. West v. Hitchcock, 205 U.S. 80, 85, 86, 27 Sup. Ct. 423, 51 L. Ed. 718.

It follows that the decree of the United States Circuit Court of Appeals must be

Affirmed.