Brewer-Elliott Oil Gas Company v. United States/Opinion of the Court

This is an appeal from a decree of the Circuit Court of Appeals of the Eighth Circuit affirming that of the District Court for Western Oklahoma. The bill in equity was filed by the United States for itself and as Trustee for the Osage Tribe of Indians, against the Brewer-Elliott Oil & Gas Company, and five other such companies, lessees, under oil and gas leases granted by the state of Oklahoma, of portions of the bed of the Arkansas river, opposite the Osage Reservation in that state. It averred that the river bed thus leased belonged to the Osages, and not to Oklahoma, and that the leases were void, that the defendants were prospecting for, and drilling for, oil in the leased lots in the river bed and were erecting oil derricks and other structures therein, and prayed for the cancelling of the leases, the enjoining of defendants from further operations under their leases, and a quieting of the title to the premises in the United States as trustee.

The state of Oklahoma intervened by leave of Court and in its answer denied that the Osage Tribe or the United States as its trustee owned the river bed of which these lots were a part, but averred that it was owned by the state in fee. The other defendants adopted the answer of the state.

After a full hearing and voluminous evidence, the District Court found that at the place in question the Arkansas river was, and always had been, a nonnavigable stream, that by the express grant of the government, made before Oklahoma came into the Union, the Osage Tribe of Indians took title in the river bed to the main channel and still had it. It entered a decree as prayed in the bill. The Curcuit Court of Appeals held that whether the river was navigable or nonnavigable, the United States, as the owner of the territory through which the Arkansas flowed before statehood, had the right to dispose of the river bed, and had done so, to the Osages. It also concurred in the finding of the District Court that the Arkansas at this place was, and always had been, nonnavigable, and that the United States had the right to part with the river bed to the Osage Tribe when it did so. It affirmed the decree.

The Osage Tribe derived title to their reservation from the Act of Congress of June 5, 1872, entitled an act to confirm to the Great and Little Osage Indians a reservation in the Indian Territory (17 Stat. 228). The Act with its recitals is printed in the margin. The de scription of the tract conveyed is:

'Bounded on the east by the ninety-sixth meridian, on the     south and west by the north line of the Creek country, and      the main channel of the Arkansas river, and on the north by      the south line of the state of Kansas.'

The Act of March 3, 1873 (17 Stat. 530, 538), directed the Secretary of the Treasury to transfer $1,650,600 from Osage funds to pay for lands purchased by the Osages from the Cherokees. The Act of March 3, 1883 (22 Stat. 603, 624), appropriated $300,000 to be paid to the Cherokees for this and other lands on condition of their executing a proper deed. The conveyance from the Cherokees to the United States in trust for the Osages recites the Cherokee Treaty of 1866 (14 Stat. 799), the Acts of June 5, 1872, March 3, 1873, and March 3, 1883, and conveys to the United States the tract of country described in the Act of June 5, 1872, except that, instead of its being bounded by the main channel of the Arkansas river, it is described as townships and fractional townships, 'the fractional townships being on the left bank of the Arkansas river.' The deed purports to be executed under authority of an act of the Cherokee Nation, which directed a deed under the Act of March 3, 1883, requiring conveyance, satisfactory to the Secretary of the Interior, to the United States in trust for the Osages now occupying said tract, 'as they occupy the same.'

We have no doubt that the title to the river bed is to be determined by the language of the Act of June 5, 1872, and that the meaning of the Cherokee deed is to be interpreted not as if its words stood alone but in the light of the acts of Congress in pursuance of which it was made, and especially of the Act of 1872, under which the Osages took possession, and which was enough to vest in them good title to the land described therein without the deed of 1883. Choate v. Trapp, 224 U.S. 665, 673, 32 Sup. Ct. 565, 56 L. Ed. 941; Jones v. Meehan, 175 U.S. 1, 10, 20 Sup. Ct. 1, 44 L. Ed. 49; Francis v. Francis, 203 U.S. 233, 237, 238, 27 Sup. Ct. 129, 51 L. Ed. 165.

Coming then to consider the effect of the words of the Act of 1872 in bounding the Osage reservation 'by the main channel of the Arkansas river,' we are met by the argument that the United States had no power to grant the bed of the Arkansas river, a navigable stream, to the Indians, because it held title to it only in trust to convey it to the states to be formed out of the Louisiana Purchase which when admitted to the Union must, in order to be equal in power to the other states, be vested with sovereign rights over the beds of navigable waters and streams. The case of Pollard's Lessee v. Hagan, 3 How. 212, 11 L. Ed. 565, is cited to sustain this proposition. That was a case where a Spanish claimant of land under navigable waters in Alabama, seeking to establish title against the state, relied on a confirmation of an invalid Spanish grant by the United States enacted after Alabama became a state. Such a confirmation was held to be ineffective against the sovereign title of the state. The language of Mr. Justice McKinley, who spoke for the court, fully sustains the argument made here that even before statehood, the United States was without power to convey title to land under navigable water and deprive future states of their future ownership. Such a view was not necessary, however, to the case before the court and has since been qualified by the court through Chief Justice Taney in Goodtitle v. Kibbe, 9 How. 471, 478, 13 L. Ed. 220. Ward v. Race Horse, 163 U.S. 504, 16 Sup. Ct. 1076, 41 L. Ed. 244, relied on by counsel for appellants, does not sustain their contention. The gist of the court's holding there was that a right to hunt upon the unoccupied lands of the United States so long as game might be found thereon granted by the United States in an Indian treaty made before the statehood of Wyoming was not to be construed as intended to continue thereafter or to give immunity from the Wyoming game laws.

The whole subject has been clarified after the fullest examination of all the authorities in a most useful opinion by Mr. Justice Gray, speaking for the court in Shively v. Bowlby, 152 U.S. 1, 14 Sup. Ct. 548, 38 L. Ed. 331. On page 47 of 152 U.S., on page 565 of 14 Sup. Ct. (38 L. Ed. 331), the learned Justice says:

'VIII. Notwithstanding the dicta contained in some of the     opinions of this court, already quoted, to the effect that      Congress has no power to grant any land below high-water mark      of navigable waters in a territory of the United States, it      is evident that this is not strictly true.'

And he then reviews the cases and thus states the court's conclusion (152 U.S. 48, 14 Sup. Ct. 566, 38 L. Ed. 331):

'We cannot doubt, therefore, that Congress has the power to     make grants of lands below high-water mark of navigable      waters in any territory of the United States, whenever it      becomes necessary to do so in order to perform international      obligations, or to effect the improvement of such lands for      the promotion and convenience of commerce with foreign      nations and among the several States, or to carry out other      public purposes appropriate to the objects for which the      United States hold the territory.

'IX. But Congress has never undertaken by general laws to     dispose of such lands. And the reasons are not far to seek. *     *  *

'The Congress of the United States, in disposing of the     public lands, has constantly acted upon the theory that those      lands, whether in the interior, or on the coast, above      high-water mark, may be taken up by actual occupants, in order to encourage the settlement of the country; but that      the navigable waters and the soils under them whether within      or above the ebb and flow of the tide, shall be and remain      public highway; and, being chiefly valuable for the public      purposes of commerce, navigation and fishery, and for the      improvements necessary to secure and promote those purposes,      shall not be granted away during the period of territorial      government; but, unless in case of some international duty or      public exigency, shall be held by the United States in trust      for future States, and shall vest in the several states, when      organized and admitted into the Union, with all the powers      and prerogatives appertaining to the older states in regard      to such waters and soils within their respective      jurisdictions; in short, shall not be disposed of piecemeal      to individuals as private property, but shall be held as a      whole for the purpose of being ultimately administered and      dealt with for the public benefit by the state, after it      shall have become a completely organized community.'

We do not think the declared purpose of the Louisiana Purchase Treaty with France (8 Stat. 200) that statehood should be ultimately conferred on the inhabitants of the territory purchased, relied on by the appellants, varies at all the principles to be applied in this case. They are the same in respect to territory of the United States whether derived from the older states, Spain, France of Mexico. If the Arkansas river were navigable in fact at the locus in quo, the unrestricted power of the United States when exclusive sovereign, to part with the bed of such a stream for any purpose, asserted by the Circuit Court of Appeals would be before us for consideration. If that could not be sustained, a second question would arise whether vesting ownership of the river bed in the Osages was for 'a public purpose appropriate to the objects for which the United States hold territory,' within the language of Mr. Justice Gray in Shively v. Bowlby above quoted. We do not find it necessary to decide either of these questions in view of the finding as a fact that the Arkansas is and was not navigable at the place where the river bed lots, here in controversy, are.

A navigable river in this country is one which is used, or is susceptible of being used in its ordinary condition, as a highway for commerce over which trade and travel are or may be conducted in the customary modes of trade, and travel on water. It does not depend upon the mode by which commerce is conducted upon it, whether by steamers, sailing vessels or flat boats, nor upon the difficulties attending navigation, but upon the fact whether the river in its natural state is such that it affords a channel for useful commerce. Oklahoma v. Texas, 258 U.S. 574, 42 Sup. Ct. 406, 66 L. Ed. 771, decided May 1, 1922; Economy Light Co. v. United States, 256 U.S. 113, 41 Sup. Ct. 409, 65 L. Ed. 847; The Montello, 20 Wall. 430, 22 L. Ed. 391; The Daniel Ball, 10 Wall. 557, 563, 19 L. Ed. 999. Voluminous testimony was introduced in the District Court upon the issue of navigability. That court considered it all with evident care and had no difficulty in reaching the conclusion that the Arkansas River along the Osage Reservation was not, and had never been, navigable within the adjudged meaning of that term, and that the head of navigation is and was the mouth of the Grand river, near which was Fort Gibson, and this is a number of miles below the reservation. The Circuit Court of Appeals reviewed this finding and fully concurred in its correctness. Neither the argument nor the record discloses any ground which can overcome the weight which the findings of two courts must have with us. Washington Sec. Co. v. United States, 234 U.S. 76, 78, 34 Sup. Ct. 725, 58 L. Ed. 1220; Texas Railway Co. v. Louisiana R. R. Commission, 232 U.S. 338, 34 Sup. Ct. 438, 58 L. Ed. 630; Chicago, Junction Ry. Co. v. King, 222 U.S. 222, 224, 32 Sup. Ct. 79, 56 L. Ed. 173; Dun v. Lumbermen's Credit Association, 209 U.S. 20, 24, 28 Sup. Ct. 335, 52 L. Ed. 663, 14 Ann. Cas. 501. It is a natural inference that Congress in its grant to the Osage Indians in 1872 made it extend to the main channel of the river, only because it knew it was not navigable. This would be consistent with its general policy. Section 2476, Rev. Stat. (Comp. St. § 4918); Oklahoma v. Texas, decided May 1, 1922; Scott v. Lattig, 227 U.S. 229, 242, 33 Sup. Ct. 242, 57 L. Ed. 490, 44 L. R. A. (N. S.) 107; Railroad Co. v. Schurmeir, 7 Wall. 272, 289, 19 L. Ed. 74. If the Arkansas river is not navigable, then the title of the Osages as granted certainly included the bed of the river as far as the main channel, because the words of the grant expressly carries the title to that line.

But it is said that the navigability of the Arkansas river is a local question to be settled by the Legislature and the courts of Oklahoma, and that the Supreme Court of the state has held that at the very point here in dispute, the river is navigable. State v. Nolegs, 40 Okl. 479, 139 Pac. 943. A similar argument was made for the same purpose in Oklahoma v. Texas, supra, based on a decision by the Supreme Court of Oklahoma as to the Red river. Hale v. Record, 44 Okl. 803, 146 Pac. 587. The controlling effect of the state court decision was there denied because the United States had not been there, as it was not here, a party to the case in the state court. Economy Light Co. v. United States, 256 U.S. 113, 123, 41 Sup. Ct. 409, 65 L. Ed. 847. In such a case as this the navigability of the stream is not a local question for the state tribunals to settle. The question here is what title, if any, the Osages took in the river bed in 1872 when this grant was made, and that was thirty-five years before Oklahoma was taken into the Union and before there were any local tribunals to decide any such questions. As to such a grant, the judgment of the state court does not bind us, for the validity and effect of an act done by the United States is necessarily a federal question. The title of the Indians grows out of a federal grant when the Federal government had complete sovereignty over the territory in question. Oklahoma when she came into the Union took sovereignty over the public lands in the condition of ownership as they were then, and if the bed of a nonnavigable stream had then become the property of the Osages, there was nothing in the admission of Oklahoma into a constitutional equality of power with other states which required or permitted a divesting of the title. It is not for a state by courts or legislature, in dealing with the general subject of beds of streams to adopt a retroactive rule for determining navigability which would destroy a title already accrued under federal law and grant or would enlarge what actually passed to the state, at the time of her admission, under the constitutional rule of equality here invoked.

It is true that where the United States has not in any way provided otherwise, the ordinary incidents attaching to a title traced to a patent of the United States under the public land laws may be determined according to local rules; but this is subject to the qualification that the local rules do not impair the efficacy of the grant or the use and enjoyment of the property by the grantee. Thus the right of the riparian owner under such grant may be limited by the law of the state either to high or law water mark or extended to the middle of the streatm. Packer v. Bird, 137 U.S. 661, 669, 11 Sup. Ct. 210, 34 L. Ed. 819.

We said in Oklahoma v. Texas, decided May 1, 1922:

'Where the United States owns the bed of a nonnavigable     stream and the upland on one or both sides, it, of course, is      free when disposing of the upland to retain all or any part      of the river bed; and whether in any particular instance it      has done so is essentially a question of what is intended. If     by a treaty or statute or the terms of its patent it has      shown that it intended to restrict the conveyance to the      upland or to that and a part only of the river bed, that      intention will be controlling; and, if its intention be not      otherwise shown, it will be taken to have assented that its      conveyance should be construed and given effect in this      particular according to the law of the state in which the      land lies. Where it is disposing of tribal land of the     Indians under its guardianship the same rules apply.' In government patents containing no words showing purpose to define riparian rights, the intention to abide the state law is inferred. Mr. Justice Bradley, speaking for the court in Hardin v. Jordan, 140 U.S. 371, 384, 11 Sup. Ct. 808, 813 (35 L. Ed. 428), said:

'In our judgment, the grants of the government for lands     bounded on streams and other waters, without any reservation      or restriction of terms, are to be construed as to their      effect according to the law of the state in which the lands      lie.'

Some states have sought to retain title to the beds of streams by recognizing them as navigable when they are not actually so. It seems to be a convenient method of preserving their control. No one can object to it unless it is sought thereby to conclude one whose right to the bed of the river granted and vesting before statehood, depends for its validity on nonnavigability of the stream in fact. In such a case, navigability vel non is not a local question. In Wear v. State of Kansas, 245 U.S. 154, 38 Sup. Ct. 55, 62 L. Ed. 214, Ann. Cas. 1918B, 586, upon which the plaintiffs in error rely, the patent of the United States under which Wear derived title was a grant, made before statehood, to land bordering on the Kansas river without restriction, reservation or expansion. The state tribunal took judicial notice of the navigability of the river, refused to hear evidence thereon, and held that the patent to land on a navigable stream did not convey the bed of the river. The United States by its unrestricted patent was properly taken to have assented to its construction according to the local law. Whether the local law worked its purpose by conclusively determining the navigability of the stream, without regard to the fact, or by expressly denying a riparian title to the bed of a nonnavigable stream, was immaterial. In either view the result there would have been the same. The case of Donnelly v. United States, 228 U.S. 243, 33 Sup. Ct. 449, 57 L. Ed. 820, Ann. Cas. 1913E, 710, is to be similarly distinguished, if, indeed it can be said after the qualification of the opinion, 228 U.S. 708, 711, 33 Sup. Ct. 1024, 57 L. Ed. 1035, Ann. Cas. 1913E, 710, to require distinguishing.

The decree of the Circuit Court of Appeals is affirmed.