Title: Crow Tribe of Indians v. Deernose
Citation: 487 P.2d 1133
Docket Number: 11999
State: Montana
Issuer: Montana Supreme Court
Date: August 10, 1971

487 P.2d 1133 (1971) The CROW TRIBE OF INDIANS, Plaintiff and Respondent, v. Donald DEERNOSE and Agnes Deernose, husband and wife, Defendants and Appellants. No. 11999. Supreme Court of Montana. Submitted June 10, 1971. Decided August 10, 1971. Douglas Freeman, argued, Hardin, Redle, Yonkee &amp; Arney, Sheridan, Wyoming, for defendants and appellants. Rex O. Arney argued, Sheridan, Wyoming. Stanton, Hovland &amp; Torsek, Hardin, for plaintiff and respondent. James Torske argued, Hardin, Montana. HASWELL, Justice. The district court of Big Horn County entered a real estate mortgage foreclosure decree on Indian trust lands on the Crow Reservation in favor of the Crow Tribe as mortgagee and against Donald Deernose and his wife, as mortgagors. From an order denying their motion to vacate this judgment, the mortgagors appeal. The sole issue upon appeal is whether the state district court possesses jurisdiction of the foreclosure action. We hold it does not, and accordingly set aside the foreclosure decree and dismiss the action. The facts are uncontested. Donald Deernose and his wife, who are both members of the Crow Indian Tribe and live on the Crow Reservation situated in Big Horn County, Montana, executed and delivered three promissory notes between 1963 and 1965 in favor of the Crow Tribe of Indians. Payment of these notes was secured by a real estate mortgage on lands situate on the Crow Reservation held in trust by the United States for Deernose and his *1134 wife. This real estate mortgage was approved by the Assistant Area Director of the Bureau of Indian Affairs pursuant to the Act of March 29, 1956, 70 Stat. 62; 25 U.S.C.A. § 483a. When the promissory notes were not paid on their due date, the mortgagee instituted an action to foreclose the real estate mortgage in the state district court of Big Horn County, the situs of the mortgaged land. Deernose and his wife, the defendants and mortgagors, were personally served in the foreclosure action. Their answer, among other things, alleged that the state district court lacked jurisdiction over the subject matter of the suit. The district court entered a judgment of default and a foreclosure decree. Thereafter, defendants and mortgagors moved to vacate the judgment on the basis the court lacked jurisdiction over the subject matter of the suit. On September 8, 1970 the district court entered an order denying the motion to vacate the judgment, from which defendants and mortgagors now appeal. We note that the parties have treated this as an appeal from a final judgment and we shall do likewise. Appellant mortgagors Deernose contend the federal courts have exclusive jurisdiction of foreclosure suits involving allotted Indian lands held in trust by the United States for individual Indian owners. They point out that neither Montana nor the Crow Tribe has complied with specific statutory procedures enacted by Congress, whereby state court jurisdiction over such suits may be acquired. Absent specific Congressional authorization coupled with strict compliance with its terms, state courts acquire no jurisdiction, they assert. Respondent mortgagee, on the other hand, argues that Congress in enacting 70 Stat. 62, 25 U.S.C.A. § 483a, relating to mortgages on allotted Indian trust lands with approval of the Secretary of the Interior, intended to terminate the trust status and emancipate such lands, thereby subjecting them to mortgage foreclosure actions in state courts. A brief history of the Crow Indian Reservation and the allotment of lands therein to individual Indians will set the stage for determination of the jurisdictional issue. The Crow Indian Reservation was created and defined by a series of treaties, agreements and acts of Congress. The general allotment of 1887 provided that allotments were to be made under regulations of the Secretary of the Interior and he was to issue a trust patent on all allotted lands providing for the United States to hold the land in trust for the sole use and benefit of the allottee. In 1934 the trust status of the allotted lands was "extended and continued until otherwise directed by Congress." 25 U.S.C.A. § 462; Putnam v. United States, (CCA8) 248 F.2d 292. Unless jurisdiction has been granted state courts by Act of Congress, the federal courts have exclusive jurisdiction over foreclosure actions involving Indian trust lands. The supremacy and exclusive character of federal law in Indian affairs is summarized in the following quotation from Federal Indian Law, compiled by the United States Department of the Interior, Office of the Solicitor, and published by the Government Printing Office, 1958 Revision, p. 3: *1135 The federal government's exclusive jurisdiction over Indian lands was recognized as early as 1864 in the Organic Act for the Territory of Montana, 13 Stat. 85. The Enabling Act of 1889, 25 Stat. 676, Sec. 4, enunciated the principle of exclusive jurisdiction by Congress over Indian lands. Section 2 of Ordinance No. 1, Montana Constitution, contains the same provision. Thus Montana courts do not have jurisdiction over the subject matter of the foreclosure suit unless Congress has granted such jurisdiction. In 1953 Congress provided a way by which states could acquire both civil and criminal jurisdiction over Indian affairs. Sec. 7 of the Act of August 15, 1953, 67 Stat. 588, 590, provides in pertinent part: Montana never passed the necessary legislation accepting civil jurisdiction over Indians on the Crow Reservation, and, accordingly, never became invested with such jurisdiction. Such proposed legislation was introduced in the 1957 Session of the Montana Legislature as House Bill 397, but failed to pass. In 1968 Congress repealed this 1953 legislation (67 Stat. 588) and enacted the Civil Rights Act of 1968 (82 Stat. 79, 25 U.S.C.A. § 1322(a) (b)), continuing federal consent to state jurisdiction with the added requirement of tribal consent: No tribal consent has been granted under the 1968 Civil Rights Act. Accordingly, jurisdiction has not been conferred on the state courts of Montana under the Act. Nor did Montana acquire jurisdiction over foreclosure suits on Indian trust lands by virtue of the provisions of 70 Stat. 62, 25 U.S.C.A. § 483a, enacted by Congress in 1956 and providing as follows: This statute by its language simply authorizes individual Indians to mortgage lands held in trust by the United States for their use and benefit, with the consent of the Secretary of the Interior, and permits such mortgages to be foreclosed in accordance with state law. It has nothing to do with granting jurisdiction to state courts in such mortgage foreclosure actions, and pointedly avoids the use of the term "jurisdiction". It is abundantly clear that state court jurisdiction in Indian affairs on reservations does not exist in the absence of an express statutory grant of such jurisdiction by Congress together with strict compliance with the provisions of such statutory grant. Illustrative of this principle is the 1971 case Kennerly v. District Court, etc., of Montana, 400 U.S. 423, 91 S. Ct. 480, 27 L. Ed. 2d 507. Where as here, Congress has not expressly granted jurisdiction to state courts except under procedures specified in the Civil Rights Act of 1968 or its forerunner, Sec. 7 of the Act of August 15, 1953, 67 Stat. 588, and where the procedures in neither enactment have been complied with, state court jurisdiction over real estate mortgage foreclosure actions on Indian trust lands situate on Indian Reservations does not exist. The foreclosure decree of the district court is set aside and the cause dismissed. JAMES T. HARRISON, C.J., and JOHN C. HARRISON and DALY, JJ., concur. CASTLES, Justice (dissenting): I dissent. I would find that the action of Congress in 1956 in granting rights to Indian owners to alienate their lands by mortgage with approval of the Secretary of the Interior was sufficient to allow either the Indian owners or the mortgagees access to the state courts. Our action here in the majority opinion would seem to go so far as to deny access to our state courts and allow only use of Federal Courts. If this rationale is carried out to its fullest extent, our Indian citizens are being denied their rights under state law.