Petition for Writ of Certiorari — Tomow v. Menominee Enterprises, Inc.

Supreme Court brief1974

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NO.@3- 760 I:

In the

Supreme Cowt of the United States

OctosEerR TERM, 1973

HENRY L. TOMOW, SR., ET AL,

Petitioners,

V8.

MENOMINEE ENTERPRISES, INC., ET AL,

Respondents,

and

N. E. ISAACSON & ASSOCIATES, INC.,

Respondent.

PETITION FOR A WRIT OF CERTIORARI TO THE

SUPREME COURT OF THE STATE OF WISCONSIN

JOSEPH I°. PRELOZNIK

MARY VAN GE\ERT

520 University Avenue

Madison, Wisconsin 53703

Counsel for Petitioners

UNITED STATES LAW PRINTING CO., CHICAGO, ILLINOIS 60618 (312) 525-6581

TABLE OF CONTENTS

PAGE

EE peat SIRT ea eT eet TO 1

a csaseeaesbaaomuian 2

PUICROENG TPPDUOIIO secs is csseicssessrscacaseocsessosscvoccvesccccosecseneve 2

I I sacteesisansninapnlaaubnina 2

ID EE UND IDET - ...,,codeseunininnasasesnsrvsanusancessenons 3

Historical Background . ...............:.0.2..cceccccocecceccesceoees 3

The Process of Termination oo..c.c.c..cccccccccseseceeceeeeeee 3

Sale of Tribal Lands to Non-Menominees ............ 6

RMON WE UNNI sceesccesescsscsiscicoscreccscecevestensenevesens 8

Reasons Why the Writ Should Be Granted ................ 11

ice le SEER SLPS ee rye a 26

Appendices

A. Opinion Below of Supreme Court of Wis-

OER OID TI TTS oanesieicceccussnsssosecsczssicsvncoscn App. 1

Wisconsin Supreme Court Opinion on

Motion for Rehearing ...0.............ccsssssceseeeseees App. 29

B. Opinion of Menominee County Circuit

Court, October 26, 1972. ..............c.cccssccssseseseeseee App. 30

Opinion of Menominee County Circuit

a BI BEE sccnvestiscsisasscesscinnsicesnsenscanes App. 36

C. Findings of Facts and Conclusions of Law

of Menominee County Circuit Court, No-

vember 16, 1972 .......... EROS IR ES ONE eT App. 57

D. Interlocutory Judgment of Menominee

County Circuit Court, December 1, 1972 ......App. 72

KE. Title 25, United States Code, Sections

NG EE scacicidthacceusisteasetbibetdionstaioea : App. 74

a |

E |

eee Ee

Storer ake

Ne rt

TABLE OF CITATIONS

Cases

PAGE

Affiliated Ute Citizens v. United States, 406 U.S, 128

PUIPIIII “© sinicnsertcimuadersiicusnaes eectuiaapenmnabennmemasadaguanscssasiitbaseiceaes 25

Carpenter v. Shaw, 280 U.S, 368 (1980) 00000000000... 19

Cherokee Intermarriage Cases, 203 U.S. 94 (1906) ..19, 20

Choate v. Trapp, 224 U.S. 665 (1912) .0000 19

Choctaw Nation v. United States, 318 U.S. 423 (1943). 19

Marlin v. Lewallen, 276 U.S. 58 (1928) oo... 19, 20

Mattz v. Arnett, —— U.S. ——, 37 L. Ed. 2d 92

SUITE ~” ics scsansincaasticesauosarausboraianlauationceasipinsanoiuns apstosabinineia 19, 25

Menominee Tribe of Indians yv. United States, 101 Ct.

a all reads 21

Menominee Tribe of Indians v. United States, 179 Ct.

Cl. 496 (1967), 391 U.S. 404 (1968) 2. 3, 11, 12, 18

Poafpybitty v. Skelly Oil Co., 86 U.S, 361 (1968)... 25

Seminole Nation v. United States, 316 U.S. 286 (1987) 21

Seymour vy. Superintendent, 390 U.S, 368 (1962) .. ....... 25

Squire vy. Capoeman, 351 U.S. 9 (1956) once 19

Tulee v. State of Washington, 315 U.S. 681 (1942) ...... 19

United States v. Payne, 264 U.S. 446 (1924) 0000... 19, 20

United States v. Shoshone Tribe, 304 U.S. 111 (1938) 12, 19

Williams v. Lee, 358 U.S. 217 (1959) ..........ccsecscsseeseee 25

Winters v. United States, 207 U.S, 564 (1905) ............ 19, 20

iii

Treaties

PAGE

Treaty of Wolf River, May 12, 1854, 10 Stat. 1064 ....3, 11, 12

Statutes

Menominee Termination Act of 1954 as amended 83-

399 (68 Stat. 250) June 17, 1954, 25 U.S.C. See-

SII TSE - <ssavcscceossancciorthevenanicapiahescttuacenensemeniiiseanted 2, 3,11

Oy Weis PIE IE escsvscueceveccatsenianiscsnactvecncnnd passim

Be Ss NE SIU erscticpsascconianenimsavesnaineanioniaal passim

Be Riis OE RIPE IED © sicrevccatesscvcsinsaxisvacssacncssiaasa 2

Others

99 Cong, Record, p. 9746 (August 24, 1953) 0000... 14

Proclamation of Final Closure of Menominee Tribal

Roll, Fed. Reg. of December 12, 1957, pp. 9951-9972 .. 4, 22

Proclamation of the Secretary of the Interior, 26 Fed.

Reg. 8726 (April 29, 1961), Plan for the future con-

trol of Menominee Indian tribal property and future

I SI arte eak inane cnatccuaeeianelnts et passim

Menominee Enterprises Articles of Ineorporation,

Article XII, 26 Fed. Reg. 3726, 3730 (April 29,

TD Tr sui Gaia cadnlsaeiisincenanananll 6-7, 8, 14, 16, 17, 18, 20

Menominee Common Stock and Voting Trust Agree-

ment, 26 Fed. Reg. 3726, 3734-8738 (April 29,

ant” apie tet 3

mea

In the

Supreme Court of the United States

Ovropen Team, 1978

No.

HENRY L. TOMOW, S8R., ET AL,

Petitioners,

vs.

MENOMINEE ENTERPRISES, INC.,, ET AL.,

Respondents,

and

N. E. ISAACSON & ASSOCIATES, INC.,

Respondent.

PETITION FOR A WRIT OF CERTIORARI TO THE

SUPREME COURT OF THE STATE OF WISCONSIN

Petitioners, Henry L. Tomow, Sr, et al, pray that a

writ of certiorari issue to review the final judgments of

the Supreme Court of the State of Wisconsin, entered in

this case on June 29, 1973, and August 14, 1973.

OPINIONS BELOW

The unreported opinion of the Trial Court: appears

post, pages 36-56, Appendix B. The opinion of the Su-

preme Court of the State of Wisconsin entered June 29,

1973, and reported at 60 Wis, 2d 1 (1973), 208 N.W. 2d

824, is reproduced post, pages 1-28, Appendix A. The

unreported opinion of the Supreme Court of the State

of Wisconsin on petition for rehearing is reproduced

post, page 29, Appendix A.

JURISDICTION

The opinions of the Supreme Court of the State of

Wisconsin, were filed on June 29, 1973, and August 14,

1973. Jurisdiction of this Court is invoked under 28

U.S.C, $1257(3).

QUESTIONS PRESENTED

1. Did the Wisconsin Supreme Court err by failing to

apply the rule of liberal construction which must be ap-

plied to the federal government’s dealings with the

Indians, when it ruled that the Menominee Termination

Plan did not reserve to tribal members the right to ap-

prove sales of tribal lands to non-Indians, contrary to

the express intent of the tribe and the Secretary of the

Interior when they approved the Plan pursuant to the

mandate of 25 U.S.C, §896?

2. Did the Wisconsin Supreme Court err when it con-

cluded that the tribe’s approval of the Termination Plan

met the requirements of 25 U.S.C. $893 respecting pro-

cedures to be followed in alienating individual tribal

members’ ownership interests in the tribal assets?

STATUTES INVOLVED

Menominee Termination Act of 1954 as amended P.L.

83-399 (68 Stat. 250) June 17, 1954, 25 U.S.C. §$898 and

896, as made effective by Proclamation of the Secretary

of the Interior, April 29, 1961, 26 Fed, Reg. 3726.

STATEMENT OF THE CASE

Historical Background

Since time immemorial the Menominee Indians have

lived as a tribe in eastern Wisconsin, In a series of seven

treaties the Menominee ceded over 11 million acres of

land to the United States and acknowledged themselves

to be under the protection of the United States. Finally,

in the 1854 Treaty of the Wolf River they received ‘ta

permanent home,’’ composed of 276,480 acres ‘‘to be

held as Indian lands are held,’’ including the land which

constitutes the subject matter of this controversy. After

a cession of a portion of these lands in 1858 for the use

of the Stockbridge-Munsee Indians, these lands were

held intact by the United States government in trust for

the tribe until April 30, 1961, when the Seeretary of the

Interior promulgated the Menominee Termination Plan,

thereby making the Menominee Termination Act fully

effective.

The Process of Termination

In 1954, Congress enacted the Menominee Termination

Act, 68 Stat, 250, 25 U.S.C. §$891-902, for the purpose

of providing ‘‘for the orderly termination of Federal

supervision over the property and members of the Me-

nominee Indian Tribe of Wisconsin.’’* Section 893, 25

U.S.C., reproduced in Appendix K, post, provides that

the beneficial ownership interest of individual Menominee

'The faets, supra, are based on the opinion of the Court of

Claims in Menominee Tribe of Indians v. U.S., 177 Ct. Cl. 496

(1967), 391 U.S. 404 (1968).

225 U.S.C. §891.

? i |

Pe |

Indians in the tribal assets were to become ‘‘personal

property’’ as of the Secretary of the Interior’s (Secre-

tary) Proclamation of the closing of the final roll of

the tribe, and that these interests would be manifested

by a Certificate of Beneficial Interest which was to be

issued by the tribe. It also provides that such interests

would be alienable only in accordance with such regula-

tions as might be adopted by the tribe. Section 896, 25

U.S.C., reproduced in Appendix E, post, required the

tribe to develop a plan for the future control of tribal

property which was to be approved and promulgated by

the Secretary of the Interior, if it conformed to appli-

cable federal law.

Until April 30, 1961, when removal of federal super-

vision was effectuated, tribal affairs were conducted by

the General and Advisory Councils. General Council

meetings were open to the entire tribe with all adult en-

rolled Menominee entitled to vote. The Advisory Coun-

cil was an elected body that concerned itself primarily

with business management of day-to-day affairs. Its ac-

tion could be overturned by a vote of a General Council

or by the Secretary of Interior.’

Pursuant to the mandate of 25 U.S.C. $896, the Menom-

inee General Council in November, 1957, created a Co-

ordinating and Negotiating Committee (C & N Commit-

tee) and authorized it to develop a Termination Plan

such as was ealled for by the Termination Act itself.

In December, 1957, the Secretary published a Procla-

mation of Final Closure of the tribal rolls which included

3,270 names.’ Effective upon this publication, the rights

% The facts in this and the following paragraphs are derived from

the opinion of the Wisconsin Supreme Court, Appendix .A, post,

and the citations given.

422 Fed. Register 9957 (December 12, 1957)

or beneficial interest of each enrolled Menominee in the

tribal assets became personal property, were to be evi-

denced by a Certificate of Beneficial Interest issued by

the Tribe, and could be alienated only in accordance with

such regulations as the tribe might adopt. 25 U.S.C. §893

| Appendix E, post].

The C & N Committee presented a proposed Termina-

tion Plan to the General Council on January 9, 1959. On

January 9, 10, and 17, 1959, the tribal members con-

sidered the proposed plan for the future control of the

tribal assets which consisted of Articles of Incorpora-

tion, By-Laws, Voting Trust Agreement, Minors Trust

Agreement and Income Bond.’ A resolution approving

the proposed Termination Plan, as amended by those

present, was passed January 17, 1959, by the General

Council on a vote of 91-16, The Secretary of the Interior

approved the Plan and published it in the Federal Regis-

ter. The Plan published included a preamble and a Cer-

tificate of Beneficial Interest which were not part of the

Plan approved by the General Council.®

Under the terms of the Plan and the Termination Act,

a tribal corporation, Menominee Enterprises, Inc., (MEI),

was to be formed to hold legal title to and manage the

tribal assets, while members of the tribe listed in the

final roll held the beneficial ownership interests in the

tribal assets. Part of the Plan called for the creation of

the ‘‘Menominee Common Stock and Voting Trust’’, com-

* Minutes of the General Council, Record, pages 633-634.

°20 Fed. Reg.. pp. 3726-3755 (April 29, 1961), Compare Rec-

ord pages cited in Footnote 5, supra.

posed of 7 persons, 4 Menominee and 3 non-Menominee,

The Voting Trust was formed contemporanecously with

the incorporation of MEL in 1961, shortly before Termi-

nation became effective, when upon disbursement of

$327,000 of tribal funds held by the Seeretary, the four

members of the C & N Committee subseribed to a single

stock certificate representing the 827,000 shares of stock

in MEL. The Committee then signed a Voting Trust

Agreement by whieh the single stock certificate was

transferred to the voting trustees, who then issued voting

trust certificates representing 100 shares of stock in MIdI

to each tribal member listed on the final roll, excepting

minors and incompetents whose certificates, comprising

40°. of the total, were turned over to the First Wiseon-

sin Trust Company acting as trustee, The CG & N Com.

mittee also contemporaneously cancelled the Certificate

of Beneficial Interest which the Chairman of the Advis

ory Council had issued to the Committee.

Sale of Tribal Lands to Non-Menominees

During the General Council meetings in January, 1999,

the question of sales of tribal lands to non-Menominee

after Termination was discussed, and the tribe approved

the language in Artiele NTL of the MEL Articles of Incor-

poration to cover such a possibility.’ On August 10, 1967,

* Article NUL reads:

ARTICLE NILE-SALE OF LAND

Unless otherwise authorized by the affirmative vote of the

holders of not less than two-thirds of the outstanding shares

of stock entitled to vote thereon, the corporation shall have no

authority to sell, exchange, assign, convey or otherwise trans-

fer all or any portion of the real property owned by the cor-

poradies. provided. however, that the board of directors, may

origage or pledge corporation assets, tor such borrowing pur-

poses as it shall deem necessary and advisable, in an amount

not excecding $250,000; and, provided, further, that the board

SEMESTER LIPO RT ae ET Rn a RS SO PE ED. ALT RIV, RIE ME I BT NE A _— ;

PRIOR LOS MORRO LALA THON PPR AL NI DR SE a

the MEL Board of Directors, who are clected under the

terms of the Plan by the voting trustees, and the trustees,

jointly passed a resolution stating in part that MEL was

authorized to sell Menominee Indian lands held by MEI

pursuant to 25 U.S.C. §§ 896 and 897 and the Menominee

Termination Plan to non-Menominee, See companion

petition, Daly vy. DNR. Pursuant to this resolution, MEI

and N. Mi. Psaaeson, a land developer and artificial lake

builder, entered into an agreement whereby they estab-

lished a joint venture to be known as “Lakes of the Me-

nominees’? (LOM). This agreement was given unani-

mous approval by the voting trustees and LOM under-

look a substantial and extensive land and lake develop-

ment project known as “Legend Lake’. MEI received

$150 per aere for the 5,170 aeres it contributed to the

LOM project. To date, approximately 2,000) reereational

homesites in the project have been sold to non-Menominee

purchasers, MIEIs Board of Directors and Isaacson de-

cided by agreement that Isaacson was to be the manag

ing partner and that Tsaaeson’s president and vice-presi-

dent would have power of attorney to exeeute all deeds

of conveyance from LOM to any purehaser in the ordi-

nary course of business.

(footnote continued)

of directors or the appropriate officers at the direction of the

hoard of directors shall have authority to lease real property

other than lands designated as forest lands; and, provided,

further, that the board of directors, or the appropriate officers

at the direetion of the board of directors, shall have authority

to sell or to convey to individuals, who were enrolled tribal

members under section 893, Tithe 25 U.S.C. (final roll) or their

heirs-at-law, individual pareels which in the aggregate will not

exceed 14,500 acres for home sites, agricultural use or other

development, which lands shall be zoned for that purpose and

shall not include lands designated as forest lands. 26 Fed. Reg.

p. 3730 (April 29, 1961). (Emphasis supplied )

Sari tens enone 92 2

i i i ee ee

PERRIS SO I ee

> RPE ae

PRM AR AOD BY

History of Litigation

The present action to stop sales of tribal land to non-

Menominee was filed in the Cireuit Court for Menominee

County, Wisconsin, October 25, 1971, by 162. enrolled

Menominee Tribal Members against MEI, the officers,

directors, and voting trustees of MII, and N, 16. Isaacson

& Associates, Inc., MEL's partner in the LOM develop-

ment.

Petitioner's alleged basically that a part of the Meno-

minee Termination Plan, Article XIL of the Mist Ar-

ticles of Incorporation,” required that sales of tribal

lands to non-Menominee be approved by two-thirds of

the tribal members, and that MEL had sold such land in

the past, and was continuing to sell such land through

the LOM joint venture without the approval of two-

thirds of the tribal members so that such transfers are

invalid. Petitioners also alleged in an alternative attack

on the land sales that the voting trust had been invalidly

established, and, hence, the voting trustees had improp-

erly exereised the voting rights of the Menominee tribal

members, and had authorized the sale of tribal land: in

violation of Article XIL of the MEL Charter and peti-

tioners’ rights and, therefore, such sales of land were

invalid.

The respondents basically admitted that such sales hy

MEL and Isaacson through the joint venture, LOM, were

continuing; that Article NIT merely required the ap-

proval of two-thirds of the voting trustees, and that al-

though none of the petitioners had entered into a writ-

ten voting trust agreement conferring upon the defendant

‘Article XII is reproduced at footnote 7, supra.

trustees the right to vote or otherwise represent shares

in MEI, that the voting trust was set up pursuant to 26

U.S.C. 896 and the Menominee Termination Plan as pub-

lished by the Seeretary of the Interior and approved by

the tribe.

The trial court noted that the case concerned a claim

that Indian lands were wrongfully taken,” and after con-

sidering the ‘Termination Act and Plan, and the circum-

stances surrounding the adoption of the Plan by the

Tribe, it held that the intent of the tribe in approving

the language of Article XIL was to create a continuing

restriction against the alienation of Indian lands to non-

Menomineces unless two-thirds of the tribal members ap-

proved such conveyances.” The trial court: also ruled

that the establishment of the voting trust did not violate

state law requiring written: agreement by shareholders

depositing their interests in such a trust; or the terms

of 25 U.S.C. $899, the provision in the Menominee Terimi-

nation Act which granted tribal members personal prop-

erty rights in the tribal property as of the closing of the

final roll.”

Upon Isaacson’s and various former MEI directors’

and voting trustees’ appeal from the trial court’s deei-

sion, (MEI did not participate in the appeal), the Wis-

consin Supreme Court rejected the broad standard of

review which was adopted by the trial court. Basing its

opinion solely upon the language of the voting trust

* Appendix B, p. 49, post.

” Appendix B, p. 54, post.

Appendix B, p. 46, post.

PE RRL SENSORY OEM TEAL EN IEE NER TNE BIN MY OLIN SBT NRE NTS OCTANE a a a ate nan are

CRETE a |

‘

Pid

agreement which was a part of the Termination Plan, it

found that such language clearly authorized the voting

trustees to approve land sales to non-Menominees.'? That

court also held that the language of Article NUL of the

MEL Charter was inoperative while the voting trust) was

in existence,"

The Wisconsin Supreme Court also rejected petition

er'’s alternative argument that the ereation of the voting

trust failed to meet the requirements of state law, and

20 U.S.C. $8898 and 896, and, therefore, petitioner's Sth

and Hth amendment rights to due process and equal pro

tection of the laws were violated."

'2 Appendix A, p. 25, post.

'S Appendix .\. pp. 27-28, post.

4 Appendix .\. pp. 22-23, post.

REASONS WHY THE WRIT SHOULD BE GRANTED

A. THE WISCONSIN SUPREME COURT ERRED BY

FAILING TO APPLY THE RULE OF LIBERAL

CONSTRUCTION WHICH MUST BE APPLIED

TO THE FEDERAL GOVERNMENT'S DEALINGS

WITH THE INDIANS, WHEN IT RULED THAT

THE MENOMINEE TERMINATION PLAN DID

NOT RESERVE TO TRIBAL MEMBERS THE

RIGHT TO APPROVE SALES OF TRIBAL LANDS

TO NON-INDIANS, CONTRARY TO THE EXPRESS

INTENT OF THE TRIBE AND THE SECRETARY

WHEN THEY APPROVED THE PLAN PURSUANT

TO THE MANDATE OF 25 U.S.C. § 896.

In 1968 this Court granted a Writ of Certiorari to de

fermine whether certain hunting and fishing treaty rights

reserved to the Menominee tribe by the 1854 Treaty of

Wolf River had been abrogated by an Act of Congress,

the Menominee Termination Aet, 25 U.S.C. S891 et seq.

This Court) resolved a conflict between the Wiseonsin

Supreme Court, whieh had ruled that certain Indian

rights were extinguished, and the United States Court

of Claims whieh ruled that in the absence of specific eon-

gressional language, federal termination legislation did

hot abrogate the Menominee treaty rights. This Court

affirmed the ruling of the United States Court of Claims.

Menominee Tribe y. United States, B01 US. 404 (196%).

Now, five years later, petitioners, individual Menomi-

nee Indians, have filed this petition to request this court

to once again reverse a determination by the Wisconsin

Supreme Court) that certain unique Indian rights no

longer survive Termination, Five years ago the Indian

MP TE KT Pe

treaty rights at issue dealt with hunting and fishing.

Today the contested rights concern the Menominee tribal

members continuing rights under the provisions of the

1854 Treaty of Wolf River and the Menominee 'Permina

tion Act and Plan to control their tribal assets, in general,

and the sale of their tribal lands to non Menominees, in

particular.

1. By enacting the Menominee Termination Act, Con-

gress guaranteed tribal members the right to con-

tinue restrictions on alienation of tribal lands

which the Menominee Tribe possessed by virtue of

the 1854 Treaty of Wolf River.

The 1854 Treaty of Wolf River gave the land whieh ts

the subject of this dispute to the Menominee 'Pribe “lor

a home, to be held as Indian lands are held.’ Although

the United States retained the fee, and the tribe's right

of occupancy was incapable of alienation or of being held

otherwise than in common, that right is as sacred and

as securely safeguarded as is fee simple absolute itin,”*"*

The lands were held in trust for the tribe by the federal

government until April 30, 1961, when the Secretary pub

lished the Termination Plan and the Menominee ‘Termi

nation Act thereby became effective. This Court in Menom-

ince Tribe of Indians vy. U.S. 3891 U.S. 404, 412 (1968),

stated:

The provision in the Menominee Termination Act

25 U.S.C, $890) that ‘tall statutes of the United

States whieh affect Indians because of their status

> See Record, p. 280.

16 [7 S, Wi Shoshone Tribe, 304 LS DE, bird (1938)

ROT OE

as Indians shall no longer be applicable to the mem-

hers of the tribe’? plainly refers to the termination

of federal supervision, The use of the word ‘statutes’

is potent evidence that no treaty was in mind,

Thus, the Menominees’ treaty right to oeeupy and hold

their treaty lands in-common were not abrogated by the

Termination Aet, Congress did not allot the tribal lands,

nor «did it order the tribe to do so. Tn enacting the Menom-

ines ‘Termination Act, Congress recognized this treaty

right by guaranteeing, the Menominee tribal members

the right to decide the future control of their tribal prop

erty:

the tribe shall... formulate and submit to the Seere-

lary a plan for the future control of the tribal prop

erty and service Tunetions now conducted by or under

supervision of the United States... . 25 ULS.C. 3896.

In the Senate floor debates on Hh RR. 2828, whieh even.

tually became the Menominee Termination Act, Senator

Watkins, the author of the Aet, was asked what the bill

provided with respeet to the protection of the tribe's

property after the Tndians were put on their own, Sena

tor Watkins responded:

The bill provides that they ean write into their own

agreement, ino whatever organization they set up,

which will probably be a corporation, a restriction

on alienation so that the property cannot be disposed

of, or someone cannot take it away from them,

The debate continued:

Sen, Chavez: That is the point IT wanted to make

because once in a while when we pretend to give the

Indians a little freedom, all we do is open up oppor-

tunity for a land grab somewhere, . . .

SM PERE ESET NEN ODE EE GN TET FINA |S CTD NNT TY ERO ENO HERI

eR mea

“~ Rg

Te a,

Sen. Watkins: It cannot happen to these Indians,

because after all is said and done, the ultimate deci-

sion will be their own.”

This exchange ig typical of the entire legislative history

of the Termination Act, in that Congress was of the per-

suasion that the Menominee Tribe had advanced to a

point where it was capable of controlling its own assets

so that Federal supervision was no longer desirable.

Thus, Congress mandated that the tribe itself formulate

the plan for future control of the tribal assets, and, there-

by, gave the tribe the right to continue restrictions on

alienation of tribal lands if it so desired.

2. The trial court recognized petitioners’ unique

rights to protect their tribal lands from alienation

after Termination, and held that the tribal mem-

bers had explicitly reserved to themselves the

right to approve land sales to non-Menominees

in Article XII of the MEI Articles of Incorpora-

tion, and that such a reservation was approved

by the Secretary of the Interior.

In deciding whether to admit evidence of the intent of

the Menominee tribe when it approved the Termination

Plan, the trial court characterized the case as involving

one of the most important problems of Indian law, the

illegal taking of Indian lands,'* and concluded that:

1799 Cong. Record, p. 9746 (Aug. 24, 1953)

18“Underlying our discussions was an appreciation of the fact

that American history is replete with instances where the Indians

have claimed that land was wrongfully taken from them.” | Ap-

pendix B, p. 49, post. |

PHEW SETHI PTE ELE NP PNA HEITOR INR RENTS OE URI I FAITE ORR IRN OB Pease

Ordinarily our law does not favor restrictions on

alienation, and a proper construction of the trust

agreement would probably place of the power of sale

in the trustees. However, I consider that this is not

an ordinary trust agreement but one that requires

a consideration of the background and an interpre-

tation of the plan against the proper setting. | Ap-

pendix B, pp. 49-50, post]

On the question of the intent to be found in the tribe’s

approval of the plan, the trial court started with the

proposition that it was ‘‘basically the plan of the Menom-

inee Indians,’’ and that the Secretary approved the

plan under the federal statute if it met certain condi-

tions.’”

After considering the minutes of the tribal meetings

from the formation of the C & N Committee in 1957

through the approval of the Plan in 1959, and the lan-

guage of the Articles of Incorporation and Voting Trust

Agreement which were contained in the Termination

Plan, the trial court concluded that by its approval of the

Plan, the tribal members had reserved to themselves in

the language of Article XII of the MET Charter, the

right to approve sales of tribal lands to non-Menominees ;

I found no discussion in any of the minutes as to

whether the trustees would have the right to exercise

the authority to sell contained in Article XTI during

the period that the shares were in trust. I do find

contained in all these writings a strong, consistent

opposition to the sale of any lands, . . . [Appendix

B, p. 52, post}

It seems improbable to me that from all of the evi-

dence that one could conelude that the Menominees

ever intended that the trustees should exercise the

1% Appendix B, p. 50, post.

Te atte a aa ll

SE Tere

power of sale of lands as an ordinary business opera

tion, It is in my opinion out of harmony and out of

character with all of the expressed sentiments con-

tained in the tribal minutes... .

Lam most impressed by the deliberate selection of a

very dificult and involved machinery to authorize the

sale of land, Acquiring the consent of two thirds of

all the shareholders is so different From the simple

matter of securing the approval of the trustees whether

it ix unanimous, two-thirds or a simple majority, Ut

also appears to me to invelve a kind and a quality of

consent by the Menominee people which cannot be sup

plied by a few persons sitting: as trustees ne matter how

vonscientious and concerned they are for the well being

of the beneticiaries for whom they are aeting. [Ap

pendix B, pp. S490, post |

3. The Wisconsin Supreme Court ignored petition-

ers’ rights under the Treaty of Wolf River, and

the Termination Act and Plan, and narrowly con-

strued a portion of the Termination Plan to abro-

gate the rights to control alienation of tribal lands

which the trial court found that the petitioners

had explicitly reserved to themselves in Article

XII of the MEI Charter.

The Wisconsin Supreme Court recognized that the con

troversy as to land sales revolved around this language in

Article NIL;

ARTICLE XIL-SALE OF LAND

Unless otherwise authorized by the afirmative vote of

the holders of not less than two-thirds of the oulstand-

ing shares of stock entitled to vote thereon, the cor.

poration shall have ne authority to sell, exchange, as-

sign, convey or otherwise transfer all or any portion

of the real property owned by the corporation: . 6 «

(Emphasis supplied)

wa)

premnry

and that “Art. XP whieh along with the voting trust

formed the very heart of the Termination Aet itself. ..??”

Hlowever, without citing any support for its position, that

Court held the language of Article NPL inoperative during

the life of the voting trust, *! thus wiping out in one sen-

fenee the rights whieh Petitioners had thought they had

assured themselves when they approved the language of

Article XTL The Wisconsin Supreme Court then redefined

the land sales issue as: “whether the voting trust agree.

ment clearly grants authority to the trustees to sell land

to non Menominees? Relying exelusively on the lan-

rhage of the voting trast agreement whieh did not mention

land sales inany context, it held that the general language

therein giving: the trustees the power to vote the stock they

held for every purpose, was a elear and specific grant of

authority to the trustees to sell land to non Menominees, ™

The Wisconsin Supreme Court, thus, considered only a

stall part oof the Menominee Termination Plan, whieh did

net address the issue of land sales, and held the portion

which did inoperative, without eitingg any support, in eon.

chiding that a seven member voting trust had the power to

sell any amount of tribal lands to non. Menominees, Al-

though the Wiseonsin Supreme Court had before it) the

trial court's and petitioner's characterization of the case

asa unique one involving Indian lands, and henee, in view

hed Appendix A, }. 23, post,

2) Appendix A, p. 27, post,

* Appendix A, p. 25, post.

* Appendin A, pp. 25-26, post.

eh ae ee ee Re ee ee ee et ae ae

of the language of Article XII, it was necessary to look to

all the pertinent documents and circumstances surrounding

the tribe’s approval of the Plan in order to ascertain the

intent of the tribe on this question, that Court refused to

consider the intent of the tribe when it approved the lan-

guage of Article XII concerning sale of tribal lands.

4. The Wisconsin Supreme Court’s method of re-

view flies in the face of this Court’s consistent

standards of reviewing dealings of the govern-

ment with the Indians.

The Court of Claims in Menominee Tribe of Indians v.

U.S..*4 in holding that Menominee hunting and _ fishing

treaty rights survived Termination, noted that the Wiseon-

ir stati pe Rea Sh Lia RS ai

OL siete one

: sin Supreme Court had based its previous decision in that

4 ease “solely on its interpretation of the words and language

4 of the Act itself,’? and that had the Wisconsin Supreme

3 Court:

: had the benefit of all the facts and circumstances sur-

4 rounding the contemporaneous consideration of Public

Law 280,... ineluding the plan of the tribe ineorporat-

ing a portion of Publie Law 280 therein, and its ap-

proval by the Secretary of the Interior, in effect mak-

ing such provisions of Public Law 280 a part of the

Termination Act, the decision of that court might well

have been different.

; In the instant ease, the Wisconsin Supreme Court did have,

: by virtue of the trial court's opinion and petitioners’ argu-

ments. the benefit of all the facets and circumstances sur-

rounding the adoption of a Termination Plan which led

24179 Ct. Cl. 49%, 510 (1967). 394 U.S. 404 (1968).

(hase OTN SEDI EDEL LULL INDIO AEE LESTE LP NEL LIESEDVEMNS, IEA LLE LESLIE FERGIE BE NSLS IPE

the trial court to hold that the tribal members had unques-

tionably reserved the right to themselves to approve sales

of tribal land to non-Menominee.

Yet it still chose to rely exclusively on one small portion

of the Plan in reaching its decision.

The fact that 25 U.S.C. $896 required the Seeretary to

approve the Plan and that such approval was necessary in

order to effectuate the Act, makes the provisions of the plan

a part of the Termination Act. *°

In examining the Government’s dealings with the In-

dians, this Court has consistently and without exception

applied a liberal rule of construction under which doubtful

expressions are to be resolved in favor of the Indians. See

Choate v. Trapp, 224 U.S. 665, 675; U.S. v. Shoshone Tribe,

304 U.S. 111, 117; Choctaw Nation y, U.S., 318 U.S. 423,

452; and Winters v. U.S., 207 U.S. 564, 576. Such dealings

have also been continuously construed by this Court in light

of the historical circumstances under which they were exe-

cuted and approved, with paramount emphasis being placed

upon what was intended, understood and consented to by

the Indians, See Mattz v. Arnett, ........ ie Sie , 37 L.

Kd. 2d 92, 101; Squire v. Capoeman, 351 U.S. 1, 9; Tulee v.

State of Washington, 315 U.S. 681, 684; Carpenter v. Shaw,

280 U.S. 363, 367; Marlin vy. Lewallen, 276 U.S. 58, 64-65;

U.S. v. Payne, 264 U.S. 446, 448-9; Winters v. U.S., 207 U.S.

064, 576-577; and Cherokee Intermarriage Cases, 203 U.S.

76, 94-95. Reference to tribal meeting minutes to ascertain

tribal intent has also occurred. See Tulee v. State of Wash-

ington, supra,

Further, this Court has often rejected arguments in such

cases which were based on literal or technical interpreta-

“9 See quotation from Court of Claims, supra.

tions of pertinent documents, see Marlin vy, Lewallen, supra,

p. 65; U.S. v. Payne, supra, p. 449; Winters v. U.S. supra,

p. 577, and Cherokee Intermarriage Cases, supra, p. 95.

The language in Winters v. U.S., supra, is particularly

appropriate here. In deciding whether the Indians there

had given up certain water rights, this Court stated that

the liberal rule of construction ;

Should certainly be applied to determine between two

inferences, one of which would support the purpose of

the agreement and the other impair or defeat it. On

account of their relations to the Government, it ean-

not be supposed that the Indians were alert to exclude

by formal words every inference which might militate

against or defeat the declared purpose of themselves

and the Government, even if it could be supposed that

they had the intelligence to foresee the ‘*double sense’’

which might sometimes be urged against them. [267

U.S. 564, 577].

In the present setting, these canons of construction re-

quire a determination that the tribal members expressly re-

served to themselves in the language of Article XII of

MEL's Charter the right to approve land sales to non-Me-

nominees, The Wisconsin Supreme Court’s refusal to look

at the intent of the tribe at the time it approved the Plan

has resulted in a decision based upon a technical, legalistic

construction of but a small portion of the Termination Plan

whieh did not mention land sales, to the exclusion of a por-

tion of the Plan specifically relating to such sales. For

the above reasons, the Wisconsin Supreme Court's decision

in regard to sales of tribal lands is totally unaeceptable

and must be reversed else the petitioners continuing treaty

rights and the Congressional intent behind 25 U.S.C. $896

are unlawfully denied.

PLONE LIT LEE IEL ILENE LAI CLL LE MS BI APES gh PERLE EAD By UF EE ABE HDT EIT INIA ner r] Pai.

5. The Secretary of the Interior’s approval and pro-

mulgation of the Menominee Termination Plan

should be construed to have incorporated tribal

and congressional intent respecting the restric-

tions on the alienation of tribal lands.

When the Seeretary of the Interior published the ap-

proved Menominee Termination Plan, he was subject to

unique limitations upon his administrative diseretion exist-

ing in the field of Indian affairs:

.+. the principles applicable to an “ordinary fiduciary”?

add little to the settled doctrine that the United States,

as regards its dealings with the property of the In-

dians, is a trustee, In Seminole Nation vy. U.S., 316

U.S. 286, Mr. Justice Murphy, speaking for the Su-

preme Court said * * * this Court has recognized the

distinctive obligation of trust incumbent upon the

Government in its dealings with these dependent and

sometimes exploited people, Menominee Tribe of In

dians, 101 Ct. Cl. 10, 19 (1944).

Moreover, the Secretary was under a special statutory

mandate, 25 U.S.C. $896, to assist the tribe in formulating

a termination plan which conformed to applicable federal

law. But the Wisconsin Supreme Court, by refusing to

view the Termination Plan as a cohesive document and in

light of the circumstances surrounding its approval by the

tribe and the Secretary, has not only ignored Menominee

treaty and statutory rights, and the expressed understand-

ing of the Menominee people; but has also imposed a state

law construction on the Menominee Termination Plan which

raises serious questions as to the legality of the Secretary’s

role in approving the Plan.

LORE R IL EMIS POHL OTIS ee BWI S SEVEN EE A EME CUES S SB AH MS eS RS RS

Cy eee |

B. THE WISCONSIN SUPREME COURT’S HOLDINGS

ON THE TRANSFER OF TRIBAL MEMBERS BEN-

EFICIAL OWNERSHIP INTERESTS TO THE VOT-

ING TRUSTEES AS PROVIDED FOR IN § 893,

CONSTITUTES A DENIAL OF THE RIGHTS

WHICH WERE GUARANTEED TO PETITIONERS

BY THAT SECTION OF THE TERMINATION ACT.

Section 893, 25 U.S.C., of the Menominee Termination Act

stated that upon the Secretary’s Proclamation of Final

Closure of the roll of the tribe,

‘the rights or beneficial interests of each person whose

name appears on the roll shall constitute personal

property and shall be evidenced by a certificate of bene-

ficial interest which shall be issued by the tribe .. .

Such interests shall be alienable only in accordance

with such regulations as may be adopted by the tribe.”’

[Appendix EK, post]

The Secretary’s proclamation was published December

12, 1957 at pp. 9951-9972 of the Federal Register. The

language of Section 893 on its face constitutes a unique ar-

rangement concerning the beneficial ownership rights of

individual tribal members in the tribal assets. The in-

common ownership rights which each tribal member held

before the Secretary’s Proclamation, became divisible per-

sonal property rights upon that Proclamation in 1957, and

yet the tribe still retained the right to issue the Certificate

of Beneficial Interest which manifested those rights, and

also to adopt regulations controlling the alienation of the

rights. Thus, both the individual tribal members and the

tribe derived certain rights to the beneficial ownership in-

terests in the tribal assets under $893.

It is petitioners’ position that the Wisconsin Supreme

Court’s holding that the tribe’s approval of the concept of

a voting trust was adequate to convey all the shares that

the tribal members were entitled to receive by virtue of the

language of $893, 25 U.S.C., is a clear violation of the

personal property rights bestowed upon the petitioners by

the language of 25 U.S.C. $893. Further, the Wisconsin

Supreme Court’s holding that the issuance of the Certificate

of Beneficial Interest by the chairman of the advisory coun-

cil and its transfer to the C & N Committee was valid in

that the tribe adopted the Plan calling for the transfer of

tribal assets to the tribal corporation and voting trust,

ignores the fact that the Certificate of Beneficial Interest

which manifested these interests, was not included in the

Plan which was approved by the Tribe. ** Therefore, any

language contained in the Certificate purporting to give

authority to the chairman of the advisory council or the

C & N Committee to issue and alienate the rights evidenced

in the Certificate is invalid, The Wisconsin Supreme

Court’s reliance on the fact that the chairman of the ad-

visory council, who issued the Certificate, was the highest

elected official of the tribe is contrary to its own recogni-

tion that the advisory council could only handle day-to-day

matters." The issuance of the Certificate evidencing all

the beneficial ownership interests in tribal assets is hardly

a routine matter. Finally, the C & N Committee was only

given the authority by the general council to formulate a

“6 See Record, pages 633-4.

*7 Appendix, A, p. 2, post

at ee ee ee Pa ge ee ee ee ee - - ee

KERwep, z

TR Rt ln It rhe j

Termination Plan, ** not to alienate the beneficial ownership

interests of the tribal members to a voting trust.

What is at stake in this issue is control of the tribal

assets after termination. The Wisconsin Supreme Court

refused to consider the minutes of the general council meet-

ings during which the Plan and the role of the voting trust-

ees were discussed. That Court’s reliance on the Secre-

tary’s approval of a ‘‘reasonable’’? Plan to establish the

Plan’s validity, cannot justify its refusal to examine tribal

intent at the time the tribe approved the Plan, nor its bla-

tant disregard of the discrepancy between the facts as

stated in its opinion and the fact that the procedure which

was followed in alienating the beneficial interests to the

voting trust did not meet the clear language of 25 U.S.C.

$893. And, again, in view of the Wisconsin Supreme Court’s

decision, serious questions are raised as to the exercise by

the Secretary of his general trusteeship duties to the tribe

and the special duty he had under 25 U.S.C. $896 to ap-

prove a Plan only if it conformed to federal law.

C. EFFECT OF THE WISCONSIN SUPREME

COURT’S DECISION ON THE MENOMINEE

AND OTHER TRIBES.

It the narrow, technical standard of review which was

utilized by the Wisconsin Supreme Court in the instant

case is allowed to stand unchanged, other state courts might

be encouraged to abrogate or deny Indian rights secured

by federal legislative or administrative actions when ques-

tions as to their construction are raised in state courts.

‘This ease concerns two of the most basic issues which econ-

cern Indian tribes; sale of tribal lands and control of tribal

28 Appendix A, p. 3, post.

OREN PE NR TS ONSET PPLE REM

TRIAD Oe Sate MS a Tatra

assets. In the instant case, the sale of over 2,000 lots to non-

Menominee purchasers has already resulted in the destruc-

tion of valuable hunting and fishing grounds by flooding

and subdivision, (see the petition in the companion case,

Daly v. DNR), and a present and potential influx of thou-

sands of permanent non-Indian residents who represent an

extremely serious threat to the survival of Menominee cul-

ture and continued local political control by the approxi-

mately 2,500 Menominee residents of Menominee County,

Wisconsin. There is no question but that irreparable harm

has heen caused by the sale of Menominee lands since 1961,

but past sales are no excuse to allow more unlawful sales

to be made,

This Court has often granted certiorari in cases where

state courts had interpreted and applied federal law involv-

ing Indian tribes in conflict with applicable decisions of this

Court. See Mattz v. Arnett, ........ i Gansenes , 37 L. Ed. 2d 92,

95; Poafpybitly vy. Skelly Oil Co., 390 U.S. 368, 368; Sey-

mour v. Superintendent, 368 U.S. 351, 353-4; and Williams

v. Lee, 358 U.S. 217, 218. And in Affiliated Ute Citizens v.

U.S., this Court granted certiorari ‘‘because of the im-

portance of the issues for Indians whose federal super-

vision is in the course of termination.’’ 406 U.S. 128, 141. In

the recent Mattz and Affiliated Ute Citizens cases, supra,

this Court recognized that the congressional philosophy and

purpose, as well as the historical background of legisla-

tion affecting the Indians in those cases was to be con-

sidered in resolving the issues raised there. See Mattz at

37 L. Ed. 2d 92, 101 and AUC at 406 U.S. 128, 151. Peti-

tioners here submit that the Wisconsin Supreme Court’s

failure to so consider the important claims which this case

presents, has irreparably damaged the Menominee tribal

assets and culture and, therefore, cannot be allowed to

stand.

“

may r=

PVN W ADL Coie

CONCLUSION

Petitioners respectfully request the Court to grant cer-

tiorari in that this case presents important federal issues

relating to all Indian tribes and the Menominee tribe in

particular, which have never been decided by this Court.

Petitioners also believe that the Wisconsin Supreme Court

has clearly decided the issues in a way which violates the

yj Menominee Indian Tribe’s rights under federal treaty and

statutes, and contrary to the manner in which the issues

similar to those raised here are decided by federal courts

and this Court,

. -

Respectfully submitted,

Joseru F. PreLtoznik

Mary Van GEMERT

Counsel for Petitioners

SNe eat LIER AE IE AY SIS

Barret ers HEMEL ELIV PIE LAOS MD NILA RG NERA AR ART I CRS 0 hy POR IRD ee “eh or Sh PES URE

APPENDIX A

SUPREME COURT OF WISCONSIN

Tomow and others, Plaintiffs and Respondents vy. N. EB.

Isaacson & Associates, Inc, Defendant and Appel-

lant: Menominer Enrenrnises, Inc., and others, De-

fondants and Respondents,

No. 508, Argued June 4, 1973.-—Decided June 29, 1973.

Avrean from parts of a judgment of the circuit court for

Menominee county; Winuiam J. Derry, Cireuit Judge of

the Fourteenth Circuit, Presiding. Affirmed in part; re-

versed in part,

Action hy Henry L. Tomow, Sr., and 161 other mem-

hers of the Menominee Indian Tribe who are or were at

all times material, registered shareholders and/or hold-

ers of voting trust certificates of Menominee Knterprises,

Inc. (hereinafter ‘plaintiffs’’), on behalf of themselves

and all other shareholders simialrly situated; against

Menominee Enterprises, Inc. (hereinafter ““MEI’’); the

officers and directors of ‘*MEI’’; the trustees of the Me-

nominee common stock and voting trust (hereinafter “yot-

ing trust’’); and N, K. Isaacson & Associates, Inc, (here-

inafter ‘Tsaaeson’’) who, together with “MEI,” entered

into a partnership known as ‘Lake of the Menominees,’?

(hereinafter “*LOM?’’) challenging the validity of the ‘vot-

ing trust,’’ the power of the trustees of the ‘‘voting trust’?

to authorize the sale of land to non-Menominees and the

validity of certain land transfers made to ‘‘LOM.”

lee. eer ae SRO Le &, reen @¢. ee

App. 2

The facts upon which the present action is based are,

for the most part, without dispute and the result of a

stipulation between the parties,

The Menominee Indian Tribe was well established in

Wisconsin two hundred years before the Kuropean settlers

began their westward movement across the United States,

Except for a small cession of land for the Stockbridge-

Munsee Reservation, the last of a series of treatios between

the United States government and the Menominee Tribe

was the ‘Treaty of Wolf River’? of 1854, Pursuant to the

treaty, the Menominees ceded land to the United States

and the United States agreed to give to the Indians land

of which the present Menominee county was the largest

part.

Traditionally, all tribal affairs were handled by the

tribe in general councils and by the advisory council, The

general councils were meetings open to the entire tribe at

which all adult enrolled Menominees could yote, The ad-

visory council, created in 1928, was an eleeted body that

eonecerned itself primarily with business management. of

day-to-day affairs, Its action could be overturned by a

yote of a general council or by the secretary of the interior.

In 1953, Congress, by concurrent resolution, instructed

the seeretary of the interior to recommend legislation

for the withdrawal of federal supervision over the Me-

nominees as well as several other named tribes and in 1954,

Congress passed the ‘Termination Act.’?' After publi-

vation of the seeretary of interior’s proclamation in the

Federal Register, ? termination became effective midnight,

168 U.S, Stat. at L., p. 250, as amended, 70 U.S. Stat. at L.,

p. 549, 72 U.S. Stat. at L., p. 290, 74 U.S. Stat. at L., p. 867; 25

USC, sees. 891-902,

226 Fed. Reg., No. 82, April 29, 1961, at page 3726.

App. 3

April 30, 1961, The proclamation provided for the transfer

of the tribe’s property which was held in trust by the

federal government and the end of any supervision and

control by it over the Menominees and the Menominee

Reservation,

In November, 1957, a general council of the tribe ereated

the **Menominee Co-ordinating and Negotiating Commit-

tee’? (hereinafter “C. N. Committee’), The funetion of

the four-member committee was to develop a termination

plan such as was ealled for by the ‘Termination Aet’’

itself." Authority for the preparation of the termination

plan came from the general council which created it under

the advisory council,

In December of 1957, the final rolls of membership in

the Menominee Tribe were closed and the membership list

of 3270 persons was published in the Federal Register.

A ‘Termination Plan’? was proposed to a general council

ina series of three meetings in January of 1959 and as

amended by those present, it was approved by a 91 to 16

vote on January 17, 1959. It was also approved by the

secretary of the interior.

Part of the plan called for the creation of the ‘*Menomi-

nee common stock and voting trust.’’ Individual members

of the Menominee Tribe did not enter into written agree-

ments creating the voting trust and consequently, whatever

legal assent which exists on the part of the Menominees

to the establishment of the voting trust emanates from the

votes of the general council. At all times material to this

action, there were seven trustees of the voting trust: four

enrolled members of the Menominee Tribe elected by the

general council and three nontribal members elected joint-

%25 USC, 896.

Rl ie ee ee eS ee a ee ood ees wn ev ane eee eer nt NPE PETE BURT Orta ts

oldie Regi RR as DN a SS =

Ma NEE CARA PBs eh toe

App. 4

ly by the advisory council and C. N. Committee, subject to

confirmation by the general council. The affirmative vote

of five trustees is needed to take any action. Under the pro-

visions of the ‘‘Termination Plan’’ the selection of the

trustees occurred in advance of the termination date and

before any trust in fact existed. While the voting trust is

in existence, it may be terminated by the tribal members

who become holders of the voting trust certificates in ten,

twenty or thirty years. Under the original plan, the certifi-

cates could not be sold or negotiated before January 1,

1971, with ‘‘MEI”’ having the option to purchase the certifi-

cates at the proposed sales price, and, in the absence of the

exercise of the option, the state of Wisconsin has the same

right. In May of 1969, the certificate holders were given

the opportunity to extend the January, 1971, deadline until

January 1, 1974, and approximately 51.2 percent of the

certificate holders voted for the extension.

C‘ontemporaneously, with the selection of the initial

trustees, the plan also called for the creation of a corpora-

tion under Wisconsin law to be known as Menominee En-

terprises, Inc. (“‘MEI’’) The members of the C. N. Com-

mitte, as individuals, signed as incorporators of ‘‘MEI.’’

Under the provisions of the plan, the voting trustees, prior

to the organization meeting of the corporation, will in-

formally name the individual directors of ‘*MEI’’ and

those persons will be named in the articles of ineorpora-

tien and will formally be elected by the subscribers of all of

the stoek—the C. N. Committee—at the organization meet-

ing.

The principal purpose of ‘‘MEI”’ is to manage and op-

erate all of the business and property, real and personal,

transferred to the corporation by the United States of

America, pursuant to 25 USC, 897. Although ‘‘MEI’’ owns

App. 5

and operates a sawmill and smaller, related businesses, its

principal asset is land, By two deeds, both dated April 26, ‘

1961, and recorded in the office of the register of deeds of j

Menominee county, Wisconsin, the United States conveyed ‘

to ‘*MEI”’ all of the land which, for practical purposes, :

previously constituted the Menominee Indian Reservation :

and which presently constitutes Menominee county, Wiscon-

sin. About one quarter of a million acres comprise Menomi-

nee county.

Under the articles of incorporation, ‘‘MEI’’ was grant-

ed the authority to issue shares of stock and the ‘‘MEI’’

directors accepted the subscription of the committee. The

Secretary of the Interior then advanced $327,000 of the

funds he was holding in trust and this money was used to

pay for the stock, ‘‘MEI”’ issued a single stock certificate

to the committee for 327,000 shares of stock. The (. N.

Comittee signed the voting trust agreement and named

as trustees those individuals previously approved by a

general council and transferred the stock ‘““MEI”’ held in

its name to the voting trust. The trustees then issued voting

trust certificates to the enrolled Menominess as evidence

of their interests in the stock the trustees held, with each

certificate representing 100 shares of stock in ‘“MEI.’’ In

the case of minors and incompetents, the certificates were

turned over to the ‘Menominee assistance trust,’’ a second

trust provided by the plan with the First Wisconsin Trust

Company acting as trustee.4 It was stipulated that each

* The plan also provided that upon termination, $1,500 was to be

distributed to each enrolled Menominee. After the other assets

were transferred to “MEI”, it issued a $3,000 income bond to each

individual Menominee. The bond is payable en December 1, 2000.

and pays 4 percent interest or $120 per year.

App. 6

step required to be taken under the ‘‘Termination Plan’’

for the organization and activation of ‘‘MEI’’ and the vot-

ing trust were in fact taken.

On August 10, 1967, the board of directors of ‘‘MEI’’

and the trustees of the voting trust jointly passed a resolu-

tion. Eight of nine directors and all of the then seven trus-

tees unanimously adopted the following resolution:

‘““‘WHEREAS, there is no other means sufficiently capable

of accomplishing the economic improvement of the Me-

nominee community except by adoption and implementa-

tion of the ERNST & ERNST REPORT; and

‘‘WHEREAS, to provide necessary tax resources for

Menominee County and/or the Town of Menominee and

for the relief of taxation on Menominee Enterprises, Ine.

(and the residents of Menominee County, Wisconsin), and

to assure continued Menominee ownership thereof :

“T, BE IT RESOLVED, that Menominee Enterprises,

Ine. is authorized to proceed with the recommendations

of the Ernst & Ernst Report as opportunity and feasibili-

ty permit; and

“TI, RESOLVED FURTHER, that the Corporation is

authorized to define economic development zones on its

land in Menominee County, Wisconsin, not to exceed 8,750

acres in areas to be defined and described from time to

time by the Menominee Common Stock & Voting Trust,

and/or the shareholders of the Corporation, whichever

then holds the common stock; and

“TI. RESOLVED FURTHER, that pursuant to Ar-

ticle XII of the Articles of Incorporation of Menominee

Luterprises, Inc, within such economic development zones

warranty deeds may issue as a form of land transfer, pro-

App. 7

vided a sufficient form of quality control is a condition of

such transfer, and provided always that sufficient areas

of land on lakeshore be reserved for Menominee use.’’

(Emphasis added.)

The ‘‘Ernst & Ernst Report’’® referred to in the reso-

lution was a technical assistance study of Menominee

county by the Economic Development Administration which

recommended that in order for the county to achieve eco-

nomic self-sufficiency, the county’s recreational resources

be developed by the creation of several large lakes from

smaller ones and the development of the cottage sites

around them. The ‘Termination Plan’’ itself had stated

only that the area had excellent commercial recreational

possibilities, the development of which was being con-

sidered.

Art. XII of the articles of incorporation of ‘‘MEI”’

referred to in the resolution contains the following pro-

vision governing the sale of land by the corporation:

“Unless otherwise authorized by the affirmative vote

of the holders of not less than two-thirds of the out-

standing shares of stock entitled to vote thereon, the

corporation shall have no authority to sell, exchange,

assign, convey or otherwise transfer all or any portion

of the real property owned by the corporation; .. .

provided, further, that the board of directors, or the

appropriate officers at the direction of the board of

directors, shall have authority to sell or to convey to

individuals, who were enrolled tribal members under

section 893, Title 25, U.S.C. (final roll) or their heirs-

at-law, individual parcels which in the aggregate will

not exceed 14,500 acres for home sites, agricultural

use, or other development, ...’? (Emphasis added.)

*Ernst & Ernst, Technical Assistance Study of the Potential for

Tourism and Industrial Development in Menominee County, Wis-

consin, C-164-66 (NEG) Economic Development Administration,

U.S. Department of Commerce, March, 1967.

Re et Aa AO ee ee

ep thes

eda Dasa tht TAR BED EES

Pt AIDEN TP THE AL ee

App. 8

On September 13, 1967, a referendum was held in which

all Menominees who held certificates (except minors and

incompetents whose interests were voted by their special

trustee, First Wisconsin Trust Company) were invited to

express their opinion on the resolution of August 10, 1967.

Of a total of 109,125 votes cast, 97,738 were for and 11,387

were against the resolution. Among the ‘‘yes’’ votes were

79,362 votes cast by First Wisconsin Trust Company. The

referendum was announced as ‘‘advisory’’ and the written

material distributed referred to the use of warranty deeds.

On July 9, 1968, ‘‘MEI’’ and N. E. Isaacson entered

into an agreement whereby they established a joint ven-

ture to be known as ‘‘Lake of the Menominees’’ (‘*LOM’’)

which was, however, to be governed by the Wisconsin

Uniform Partnership Act. By the terms of the agreement

of July 9, 1968, the partnership was entered into for the

purpose of holding, developing and selling to persons in-

cluding non-Menominees certain lands consisting of 5,170

acres located within the economic development zone _ re-

ferred to in the joint resolution of August 10, 1967.

The agreement of July 9, 1968, was contingent upon

approval by the trustees which was given unanimously

by them in July of 1968. ‘‘LOM’’ undertook a substan-

tial and extensive land and lake development project known

as ‘Legend Lake’’ and among other things, approximately

2,000 recreational homesites out of 2,600 such sites have

heen sold and water-level control dams and roads have been

constructed. Subsequently, between the dates of September

12, 1968, and April 5, 1971, the approximately 5,170 acres

referred to in the partnership agreement of July 9, 1968,

were conveyed by ““MEI"’ to ‘*LOM?’’ partnership by

ineans of seven warranty deeds, all of which were executed

85 1g POTEET DLE LG IE LIL ND EME ERG

App. 9

and recorded in the office of the register of deeds of Menom-

inee county, Wisconsin prior to the commencement of the

present action. Of the 5,170 acres conveyed, 1,333 acres

valued at $150 per acre, represented ‘‘MEI’s’? initial con-

tribution to the “LOM”? joint venture. By the agreement,

‘‘MEI”’ gave to ‘‘LOM”’ the option to purchase an addi-

tional 3,837 acres also at $150 per acre.

On September 30, 1968, ‘‘MEI’’ and Isaacson by writ-

ten agreement decided that Isaacson was to be the ‘‘manag-

ing partner’’ of ‘‘LOM”’ and to facilitate the management,

development and sales of land that N. E. Isaacson, as

president of Isaacson, and Ralph Voss, as vice president

and assistant secretary, would have power of attorney to

execute all deeds of conveyance from ‘‘LOM”? to any pur-

chaser in the ordinary course of business.

The agreement of July 9th was performed to a substan-

tial degree and in 1969, Isaacson and ‘‘MEI”’ agreed to

increase the number of lots to be developed and sold from

1,800 to 2,600, all of them to be laid out on the land con-

veyed by the seven warranty deeds. On or about March

11, 1969, ‘LOM’? applied for a permit to construct a third

dam in the Legend Lake Project. On October 15, 1971,

Isaacson asked ‘‘MEI”? if it would agree to try to sell out

the project in 1972 and to incur additional selling costs be-

yond the agreement ceiling of 30 percent. A motion (of

the ‘*MEI’’? Board) was passed to refer the matter to

LOM’? Management Committee to act within its discre-

tion.

The present action was filed in the circuit court for Me-

nominee county, Wisconsin on October 25, 1971, and a lis

pendens containing the names of the parties, the object

of the action, and a description of the land involved in the

Re ae |

App. 10

action was filed with the office of the register of deeds in

Menominee county on the same day. The first count of

plaintiffs’ complaint alleges that neither they nor any

other ‘‘MEI’’ shareholder ever entered into a written vot-

ing trust agreement creating a voting trust for the purpose

of conferring upon defendant trustees or any other trustees

the right to vote or otherwise represent their shares in

‘‘MEI.’”’ It goes on to allege that the defendant trustees

of the voting trust are and have been unlawfully exercising

the voting rights of plaintiffs and other shareholders in

that they have elected the defendant directors of ‘‘MEI’’

and excepting trustees Ignace and Deer, they have par-

ticipated in, approved and/or ratified a decision of the

defendant directors to sell ‘‘MEI’’ land to nonenrolled

Menominee tribal members in violation of the articles of

incorporation and in usurpation of plaintiff’s rights. Like-

wise, they contend that pursuant to the trustees’ approval,

the officers and directors of ‘‘MEI’’ entered into an agree-

ment with defendant Isaacson purporting to bind ‘‘MEI’’

to a joint venture involving the sale of land to non-Indians.

Plaintiffs’ complaint as a second count, alleges that

with the exception of certain limited sales of real property

to enrolled tribal members, ‘‘MEI’s’’ articles of incor-

poration specifically bars the sale of corporation real prop-

erty unless it is authorized by the affirmative vote of the

holders of not less than two thirds of the outstanding shares

of stock entitled to vote thereon, and in spite of the fact

that no sale of ‘‘MEI”’ real property has ever been au-

thorized by the holders of not less than two thirds of the

outstanding shares of stock entitled to vote thereon, the

officers and directors of ‘‘MEI’’ have purported to sell

corporate real property through the ‘‘LOM”’ joint venture.

App. 11

Pursuant to their first count, relating to the validity

of the ‘‘Voting Trust,’’ plaintiffs demanded judgment

declaring the ‘‘voting trust’? null and void; an order

permanently enjoining the ‘‘MEI’’ directors from at-

tempting to exercise in any way the rights of the plain-

tiffs, a determination that the joint venture agreement

of July 9, 1968, between Isaacson and ‘‘MEI”’’, except as

to the rights of prior good faith purchasers, is null and

void; that the declaration in the July 9th agreement given

to N. KE. Isaacson and Ralph Voss power of attorney to

execute all deeds of conveyance from ‘‘LOM’’ to any

purchaser is null and void; an order calling for the election

of a new board of directors; and an order requiring de-

fendants ‘‘MEI’’ and Isaacson to recovery to ‘‘MEI”’ all

properties formally transferred to ‘LOM’? which had not

heen conveyed to a good faith purchaser at the time the

defendants learned of the lawsuit, or at the time of filing

the action, whichever is earlier.

As judgment on the second count of their complaint,

plaintiffs demanded that a special shareholders meeting

be called for the purpose of electing new directors of

‘*MEI’’; that the “LOM” agreement be declared null and

void; that the officers and directors of ‘‘MEI’’ be en-

joined and restrained from honoring its contract with

Isaacson in any way whatsoever; an order requiring the

officers and directors of ‘‘MEI’’ to make an accounting

and to pay into court all money and assets accounted for;

and other relief concerning the liability of the officers and

directors to ‘MEI’? for all losses and damages occasioned

by their acts,

On April 21, 1972, the plaintiffs, by stipulation and

with court approval, filed a supplemental complaint which

added certain defendants because of their election as trus-

INP a TAP QO tee ey VOR RIE fier

wt PEO tn nd i tam

App. 12

tees of the ‘‘voting trust’’ or directors of ‘‘MEI.’’ The

supplemental complaint also alleged that the joint venture

agreement dissolved December 31, 1971, unless extended;

that Isaacson and ‘‘MEI’’ did not extend it; that another

agreement for the sale of land to non-Menominees would

require authorization by the holders of at least two thirds

of the outstanding shares entitled to vote or that is to

say, enrolled Menominees,

They also allege that since termination of the agree-

ment, neither two thirds of the enrolled Menominees nor

two thirds of the trustees have authorized new sales to

non-menominees and that at the present time, ‘‘LOM’’

could not obtain a two-thirds vote of authorization from

the trustees, as evidenced by the affidavits by six of the

eleven trustees, stating that they were opposed to land

sales to non-Menominees and would vote against such sales

were a vote taken; and that in spite of this, ‘*MET’’ and

Isaacson are and threaten to continue to sell land to non-

Menominees.

The action came to trial before the court, without a

jury, on May 8, 1972. In its written decision of July 24,

1972, the trial court found that although the ‘‘voting

trust’’ was not invalid, art. XII of the articles of incor-

poration of ‘‘MEI’’ relating to the sale of land by the

corporation was ambiguous and consequently heard ex-

trinsic evidence concerning the basic intent of the parties

in the adoption of art. XII. After a review of the evi-

dence upin which it relied, the court concluded that the

reference to ‘‘two thirds of the outstanding shares of

stock entitled to vote thereon ...’’ referred to two

thirds of the enrolled Menominees and not to a_ two-

thirds vote of the trustees. The court then granted an

injunction against any further sales of land with the

App. 13

understanding that jurisdiction would be retained to con-

sider evidence in support of other remedies at a later date.

Subsequent to the July 24th decision, the defendants,

by orders to show cause, brought motions seeking to clarify

and limit the earlier injunction. The parties agreed at

the time of the hearing on these motions that there were 121

sales of lots, estimated at approximately $900,000 in which

offers of purchase had been accepted, but the delivery of

deeds and formal closing had not yet oceurred. In six

of these sales, the offer and acceptance had occurred prior

to October 24, 1971, the date of filing of the lis pendens.

Isaacson contended that the conveyance of the seven

warranty deeds were executed conveyances, and even

though made in an irregular manner under the court’s

earlier ruling, they should not be impeached or disturbed

because of any irregularity in the exercise of the unques-

tioned corporate power. Although it recognized the rule

of law relied on, the circuit court, nevertheless, conclud-

ed that the transfer of 5,170 acres of land by seven deeds

by “*MEI”’ to **LOM,”’ all occurring prior to the filing of

the lis pendens, were not entitled to the status of completed

or executed transactions.

From those parts of the court’s interlocutory judgment

that held ‘‘Article XII of MEI’s’’ articles of incorpora-

tion ambiguous; that held the seven conveyances from

‘*MEI”’ to ‘‘LOM”? prior to the commencement of the ae-

tion to be without necessary stockholder approval and,

therefore, an improper exercise of the corporation’s power

to convey land; that held sales made subsequent to the

commencement of the action were subject to the continuing

jurisdiction of the court because the seven conveyances

from ‘MEI’? to ‘LOM’? were not executed corporate

transactions; and which enjoined the defendants from any

App. 14

further sales of land to non-Menominees, Isaacson and the

other named defendants have appealed. Defendant

‘““MEI”’, however, is not participating in this appeal.

From that part of the interlocutory judgment holding

the ‘voting trust’’ valid under Wisconsin law, the plaintiffs

have appealed.

For the appellant there were briefs by Welsh, Trow-

bridge, Planert & Schaefer of Green Bay, and oral argu-

ment by Vance M. Waggoner, of Green Bay.

For the plaintiffs-respondents there was a brief by

Joseph F. Preloznik and Mary E. Van Gemert, both of

Madison, and oral argument by Mr. Preloznik,

For the defendants-respondents there were briefs by

Foley & Lardner of Milwaukee, and oral argument by

Gilbert W. Church of Milwaukee.

Hantey, J. Three issues are presented on this appeal.

1. Did the trial court err in holding that the Menomi-

nee common stock and voting trust was not invalid be-

cause it was contrary to controlling federal and state

law and the United States Constitution ;

2. Did the trial court err in holding that art. XII of the

articles of incorporation of ‘‘MEI’’ was ambiguous and,

therefore, a proper matter for judicial construction; and

3. Did the trial court err in holding that the unsold

land which was conveyed by ‘‘MEI’’ to ‘LOM’? without

the approval of the individual tribal members was sub-

ject to plaintiffs’ lis pendens and an injunction prohibiting

its sale?

Validity of voting trust.

The ‘‘Termination Act’? which mandated the complete

withdrawal of federal supervision and control over the

App. 15

Menominee Tribe called for the formulation of a plan

for the future control of tribal property and service

functions by the tribe itself. 25 USC, 896 of the federal

statute provided that the plan, when completed, was to

be submitted to the secretary of the interior who ‘‘.. .

shall accept such tribal plan as the basis for the convey-

ance of the tribal property if he finds that it will treat

with reasonable equity all members on the final roll of

the tribe prepared pursuant to Section 893 of this title.

and that it conforms to applicable Federal and State law.’’

(Emphasis added.)

Contrary to the contentions of the plaintiffe who are

as to this issue appellants on appeal, both the secretary

of the interior and the trial court were satisfied that

the mandate of 25 USC, 896 was complied with. After

a review of the various arguments which the plaintiffs

have raised, this court reaches the same conclusion.

The plaintiffs’ first contention in support of their con-

clusion that the voting trust here involved is invalid is

that Wisconsin’s voting trust statute, see. 180.27, Stats.,

was not complied with, See, 180.27, was originally enacted

by see. 7 of ch, 731, Laws of 1951, and now provides:

“Voting trusts and agreements among shareholders,

(1) Any number of shareholders of a corporation may

create a voting trust for the purpose of conferring upon

a trustee or trustees the right to vote or otherwise rep-

resent their shares by entering into a written voting

trust agreement specifying the terms and conditions

of the voting trust, by depositing a counterpart of the

agreement with the corporation at its registered office

and by transferring their shares to such trustee or

trustees for the purposes of the agreement. Such trus-

tee or trustees shall keep a record of the holders of vot-

ing trust certificates evidencing a beneficial interest in

_ So TEEN FEN

App. 16

the voting trust, giving the names and addresses of all

such holders and the number and class of the shares in

respect of which the voting trust certificates held by

each are issued, and shall deposit a copy of such record

with the corporation at its registered office. The

counterpart of the voting trust agreement and the copy

of such record so deposited with the corporation shall

be subject to the same right of examination by a share-

holder of the corporation, in person or by agent or at-

torney as are the books and records of the corporation,

and shall be subject to examination by any holder of a

beneficial interest in the voting trust, either in person

or by agent or attorney, at any reasonable time for any

proper purpose.

‘*(2) Agreements among shareholders regarding

the voting of their shares shall not be subject to the

provisions of this section regarding voting trusts.’”

Under the above statutes, pursuant to an agreement,

shareholders transfer their shares to the voting trustees

which transfers are in turn recorded on the corporation’s

book, thereby making the trustee the record holders. Dur-

ing the period of the trust and pursuant to the trust

agreement, the trustees vote the shares. In exchange for

the shares, voting trust certificates which represent the

equitable interest in the shares transferred, and any shares

which might be awarded as dividends are issued by the

trustees to the original shareholders.

7 The statute originally limited a voting trust to not more than

twenty years; ten years longer than the Model Code. Fven the

twenty-year limitation was omitted by ch, 399 of the Laws of 1953.

Such unlimited duration is not common to the statutes of most other

states. See Henn, Law of Corporations (1970), p. 392, sec. 197.

Sub. (2) of sec. 180.27, exempting shareholder agreements from

the provisions of the voting trust statute, was created by sec. 15,

ch. 285, Laws of 1971.

App. 17

In material part, sec. 180.27, Stats., provides that ‘‘ Any

number of shareholders of a corporation may create a

voting trust . . . by entering into a written voting trust

agreement ...’’ The thrust of the plaintiffs’ argument

is that the individual enrolled members and not the C. N.

Committee whose members signed as incorporators of

‘““MEI”’ and who also signed the voting trust agreement

were the ‘‘shareholders’’ of the corporation for purposes

of entering into the agreement.

Under the articles of incorporation, ‘‘MEI’’ was granted

the authority to issue shares of stock and the ‘‘*MEL”’

directors accepted the subseription of the C, N, Com-

mittee which was originally created by the general coun-

cil to develop the Termination Plan. The secretary of

the interior then advanced $327,000 of the funds he was

holding in trust and this money was used to pay for the

stock. ‘‘MEI”’ issued a single stock certificate to the

committee for 327,000 shares of stock. The C, N. Com-

mittee signed the voting trust agreement and named as

trustees those individuals previously approved by a gen-

eral council and transferred the stock ‘*MEIT’’ held in

their name to the voting trust. The trustees then issued

voting trust certificates to the enrolled Menominees as

evidence of their interests in the stock the trustees held,

with each certificate representing 100 shares of stock in

‘*“MEI.”’

The defendants contend that the voting trust was formed

in exact compliance with see. 180.27, Stats. Shares in

‘‘MEI”’ were issued to members of the C, N, Commit-

tee who then transferred the stock to the trustees on

the basis of a written instrument. The shareholders thus

created the trust by ‘‘entering into a written voting trust

PVP LIOR SP er eK

Dae Dib hs eee ae

App. 18

agreement’’ as required by statute. Likewise, this pro-

cedure conformed exactly to the provisions in the Termina-

tion Plan which was agreed upon by the Menominees.

Plaintiffs contend that the vote of the general council

in January of 1959, which approved the Termination

Plan—including the voting trust agreement—could not

be a substitute for individual ‘‘shareholder’’ approval.

This argument, together with the cases which are cited

by the plaintiffs, are all predicated on the proposition

that individual Menominees had been issued ‘‘shares’’ of

stock in ‘‘MEI’’ prior to the formation of the trust.

While it is clear that 25 USC, 893, referring as it does

to the ‘‘rights or beneficial interests’’ of each of the en-

rolled Menominees, ‘‘shall constitute personal property

... evidenced by a certificate of beneficial interest which

shall be issued by the tribe’’ gave to each enrolled Meno-

minee at the very least an undivided one third 270th in-

terest in the assets of ‘‘MEI,’’ such an interest cannot

be analogous to a ‘‘share of stock.’’ Sec. 896 of Title

25, USC, relating to the Termination Plan which the

tribe was to formulate, states that ‘‘[t]o the extent neces-

sary, the plan shall provide for such terms of transfer

pursuant to Section 897 of this title, by trust or other-

wise, as shall insure the continued fulfillment of the plan.’’

(Emphasis added.) Sec. 897 provides that ‘‘[o]n or be-

fore April 20, 1961, the Secretary [of the Interior] is

authorized to transfer to the tribal corporation or to a

trustee of the Secretary’s choice ... the title to all prop-

erty, real and personal, held in trust by the United States

for the tribe.’’ (Emphasis added.)

age ban ot aOR PES EL IRA ALI ERI

The two deeds by which the United States conveyed

3 what now constitutes Menominee county were conveyed

4 to ‘*MEI’’, not to the individual enrolled Menominees.

= rite LINEN PRN ER IEEY AME IERIE FRE MSIE IN LN, MENT 5 FE 4198 inne Msi ye ts ff

App. 19

Likewise, the Secretary of the Interior advanced the

$327,000 of the funds held in trust, not to each enrolled

Menominee, but rather to the committee who in turn

used it to pay for the stock it had previously subscribed

to. Prior to termination, individual enrolled Menominees

never had certificates or control over their interests in

tribal assets. Indeed, the assets were held in trust by

the federal government and were subject to tribal and

federal law and not corporate law as the plaintiffs con-

tend.

While it is clear that the original draftees of sec.

180.27, Stats., never contemplated a factual situation like

the one presented in this case, it likewise is manifestly

clear that the procedures here employed did not run coun-

ter to the statute. The trial court agreed and stated:

‘“‘T am impressed by the reasonableness of the

method established in the plan contrasted with the

unwieldy procedure of having the shares issued to the

individual Menominees some of whom would be mi-

nors or incompetents and then placed in trust under

procedural requirements of sections 180.27. It is ob-

vious that a trust arrangement was considered in

the best interests of the Menominees in accordance

with their own plan. It seems to me the procedure

adopted to accomplish this was eminently sensible.’’

Plaintiffs next contend that the certifieate of bene-

ficial interest representing tribal members’ rights or

beneficial interests in tribal property was issued, trans-

ferred and cancelled in violation of 25 USC, 893. See.

893 of Title 25, USC, after setting forth a very precise

procedure for determining who will be considered an

enrolled Menominee with the initial decisions by the tribe,

followed by an appeal right to the Secretary of the In-

terior, provides:

Se oa

bt Ne EO Pte Et

App. 20

‘‘When the Secretary has made decisions on all

appeals, he shall issue and publish in the Federal

of the tribe and the final roll of the members. Ef-

fective upon the date of such proclamation, the rights

or beneficial interests of each person whose name

appears on the roll shall constitute personal prop-

erty and shall be evidenced by a certificate of bene-

ficial interest which shall be issued by the tribe. Such

interests shall be distributable in accordance with

the laws of the State of Wisconsin. Such interests

shall be alienable only in accordance with such regu-

lations as may be adopted by the tribe.”’

The certificate itself was executed on June 17, 1964,

by James G. Frechette, Chairman, Menominee Advisory

Council, and begins as follows:

‘“‘This is to certify that the persons whose names

are listed in the schedule attached hereto, identified

as ‘Final Roll-Menominee Tribe of Indians of Wis-

consin’ (Vol. 22, FreperaL ReoisteER Number 240,

pages 9951-9972, inclusive) are the holders (herein-

after sometimes called ‘Tribal Members’) of undi-

vided equal shares in this Certificate of Beneficial

Interest, which evidences the rights and interests of

each such person and all of them and the personal

representatives, heirs or next of kin of deceased

Tribal Members (hereinafter sometimes called ‘law-

ful distributees’) to all property, real and personal,

now or hereafter, legally or beneficially owned by

the Menominee Indian Tribe of Wisconsin. This

Certificate has been issued by said Tribe as of June

17, 1954, pursuant to the provisions of section 391,

Title 25 U. S. C. and is the Certificate of Beneficial

Interest therein described.’’

It goes on to provide that it is delivered to the C. N.

Committee who shall hold it on behalf of the tribal mem-

bers of their lawful distributees, ‘‘ According to the terms

App. 21

of the certificate.’’ Thereafter, the C. N. Committee ‘‘on

behalf of the tribal members will cancel the certificate in

accord with the terms and provisions of the ‘Plan. . .’”’

The provisions of the plan relating to the certificate pro-

vide that:

“Description of economic plan. The economic

plan, designed to promote the highest beneficial use

of the communal property, is set forth in six basic

documents: (1) Articles of Incorporation of Meno-

minee Enterprises, Ine., (2) By-Laws of Menominee

Enterprises, Inc., (3) a common stock and voting

trust, (4) a bond indenture, (5) a Menominee As-

sistant trust, (6) a Certificate of Beneficial Interest.

‘‘One Certificate of Beneficial Interest in form at-

tached will be issued pursuant to section 893 Title

25 U. S. C., with list attached thereto of the tribal

roll of 3,270 members as of June 17, 1954 (as finally

proclaimed.) The Certificate will be issued as of

June 17, 1954, in advance of termination date, and

will be held by the Coordinating and Negotiating

Committee until that date. At that time, the Com-

mittee will mark it ‘cancelled’ and file it with its

records.

Tay SPAT gH

‘It is a part of this Plan that (1) the issue of stock

to the said Coordinating and Negotiating Committee,

(2) the issue of voting trust certificates to tribal

members and lawful distributees of deceased mem-

bers upon deposit of the stock in the Common Stock

and Voting Trust, (3) the issue of income bonds, (4)

the transfer of real and personal property to the

said Coordinating and Negotiating Committee and/or

to Menominee Knterprise, Inc., or any subsidiary,

(5) the transfer of real and personal property to

any public body; shall all be in substitution for and

consideration of cancellation of the Certificate of

Beneficial Interest and no one shall thereafter have

any rights or interest in such Certificate.’’

App. 22

The plaintiffs contend that the chairman of the ad-

visory council had no authority to issue the certificate

since by express terms of 25 USC, 893 only the ‘‘tribe’’

could issue the certificate. Likewise, they contend that

the chairman had no authority to authorize the C. N.

Committee to cancel the certificate in accordance with

the terms and provision of the Termination Plan. As-

suming the chairman did have authority to issue the

certificate, the plaintiffs contend the C. N. Committee

did not have authority to cancel the certificate in ex-

change for ‘‘MEIT”’ stock.

First of all, by its very terms, the primary purpose

of the certificate of beneficial interest was to put the

tribe on record as approving the final roll.

The certificate was signed by the chairman of the

advisory council for the tribe because he was the high-

est elected official of the tribe. Furthermore, the trans-

fer to the C. N. Committee of the certificate and its

subsequent cancellation of the certificate were in strict

compliance with both the terms of the certificate and

with the federal statute. Sec. 893 provided that the

interests represented by the certificate could be ‘‘alien-

able’’ only in accordance with regulations adopted by the

tribe. The tribe did adopt the plan calling for the trans-

fer of tribal assets to the tribal corporation and trust.

The adoption of the plan ‘‘hy the tribe’’ and its use as

‘‘the basis for the conveyance of the tribal property’’

were also authorized by the federal statute. (25 USC,

896, 897)

Plaintiffs’ constitutional attack based on both the due

process and equal protection clauses are also without

merit. As stated before, the individual Menominees were

not ‘‘shareholders’’ as that term is used in see. 180.27,

App. 23

Stats., and consequently plaintiffs’ argument that no

other ‘‘shareholders’’ of a Wisconsin corporation could

be made to enter into a voting trust without their in-

dividual written approval must fail for that reason.

Plaintiffs’ argument that the procedures here employed

deprived them of their personal property without due

process of law totally disregards the facts that the Ter-

mination Plan was approved by the tribe.

We conclude that the trial court’s interlocutory judg-

ment herein, to the extent that it held the Menominee

common stock and voting trust to be valid was correct.

Ambiguity of trust.

Defendants contend that the trial court erred in de-

claring art. XII of the articles of incorporation of

‘*MEI’’ ambiguous and, therefore, subject to judicial

construction by resort to extrinsic evidence. The plain-

tiffs who, as to this issue, are respondents, support the

determination of the trial court. All parties are in agree-

ment that extrinsic evidence bearing on the intent of art.

XII may only be resorted to once an instrument has been

declared ambiguous in light of circumstances surround-

ing it at the time of its execution. In re Fortwin Trust

(1973), 57 Wis. 2d 134, 203 N. W. 2d 711; Estate of Breese

(1959), 7 Wis. 2d 422, 96 N. W. 2d 712.

Art. XII in material part provides:

‘‘Unless otherwise authorized by the affirmative

vote of the holders of not less than two-thirds of the

outstanding shares of stock entitled to vote thereon,

the corporation shall have no authority to sell, ex-

change, assign, convey or otherwise transfer all or

any portion of the real property owned by the cor-

poration: .. .’’ (Emphasis added.)

‘

App. 24

The italicized language in art. XII is the subject of

dispute between the parties, as that language relates

to ‘“‘who’”’ is entitled to vote on proposed sales of land

to non-Menominees: the trustees of the voting trust or

the individual enrolled Menominees. The trial court con-

cluded that it was the intent of the Menominees in en-

acting art. XII that such power was to be retained by

each enrolled Menominee. It first, however, declared art.

XII ambiguous.

In regard to art. XII which along with the voting

trust formed the very heart of the Termination Act it-

self, the trial court entered the following conclusions of

law which were incorporated into the interlocutory

judgment:

“3 =Articl. XII of the Articles of Incorporation

of Menominee Enterprises, Inc., requiring the ‘af-

firmative vote of the holders of not less than two-

thirds of the outstanding shares of stock entitled to

vote’ before the corporation may sell land to non-

Menominees is ambiguous as it relates to the period

of time during which the Corporation’s stock is held

by the Voting Trust.

‘4. The seven conveyances of land made by Me-

nominee Enterprises, Inc. to Lakes of the Menomi-

nees, a partnership, prior to the commencement of

this action, were made without the necessary approv-

al required by Article XII of the Articles of Incorpo-

ration and were an improper exercise of the Corpo-

ration’s power to convey land and are, therefore, in-

valid.’’ (Emphasis added.)

Although the written decision of the trial court «does

make reference to several of the provisions of the voting

trust agreement, it is evident that the court in deter-

mining that individual Menominees and not trustees

PIN RI 6 ae tg ROIS ith

App. 25

were authorized to approve land sales to non-Menomi-

nees, placed principle reliance on art. XII itself. We

think the authorities are to the contrary.

‘“‘The powers and duties of the trustees are to be

determined from the trust agreement as a whole, not

reading one provision to nullify another and thus

defeat the trust.’’ 5 Fletcher, Cyclopedia Corpora-

tions (1967 rev.) ch. 14, p. 433, sec. 2091.1.

‘‘Powers granted to the trustees by the trust in-

strument are rarely confined to voting at the elec-

tion of directors; often their authority specifies the

power to vote in all respects as could a full owner of

shares, including the right to ‘consent’ to fundamental

changes, increase or reduction of capital stock, sale

of all assets, and liquidation of the corporation. The

grant of power, however, must be explicit since the

trustees are denied any power not clearly granted.’’

1 Hornstein, Corporation Law and Practice (1959),

p. 298, sec. 212.

The question, therefore, is whether the voting trust

agreement clearly grants authority to the trustees to sell

land to non-Menominees. This court concludes that it

does.

’

As prescribed by the Termination Plan, the powers

of the trustees of the voting trust were spelled out in

art. III of the voting trust as follows:

‘“‘TIII Powers or tTrusters 1. The Trustees, in re-

spect of the stock held by them hereunder, are here-

by vested as owners of such stock (without limita-

tion except as herein otherwise expressly provided)

with all of the rights, powers, and privileges of every

kind and character, of owners thereof, including,

without limiting the generality of the foregoing (a)

the right to vote the same, as hereinafter provided,

for every purpose, (b) the right to become parties to

PREMALL a5 BP 4 HOB WAS ARATE L A ey BP Gata OM

App. 26

or prosecute or intervene in any suits or other legal

or administrative proceedings affecting the stock

deposited hereunder, the Company, or the powers,

duties or obligations of the Trustees, and (c) the

right to transfer all or any part of the Company’s

stock held hereunder into their names as Trustees

or into the name ‘‘The Trustees of Menominee Com-

mon Stock and Voting Trust.’? (Emphasis added.)

General language at the beginning of art. LI gives

the trustees ‘‘all of the rights’? of owners of the stock,

subject to certain exceptions not applicable to the pres-

ent dispute, followed by the very specific language of

sub. (a) which grants to them the right to vote the shares

‘‘for every purpose.’’

Although referring to this language contained in art.

III, the trial court at no time tried to reconcile it with

its conclusion of ambiguity. Art. III certainly is clear

enough and broad enough to authorize the sale of land

to non-Menominees. Other language in the trust agree-

ment indicates that certificate holders did not have the

right to vote on land sales to non-Menominees.

Art. IV requires the approval of two thirds of the

certificate holders before the trustees are permitted to

sell the stock. The absence of similar provisions re-

quiring the approval of certificate holders for land sales

implies that approval of the certificate holders was not

required for land sales.

Art. X of the trust specifically provides that:

‘‘1, The Trustees may construe this agreement,

and their construction made in good faith shall be

conclusive and binding upon the parties hereto, . . .”’

Such a provision has been recognized in Wisconsin as

heing valid. Estate of Koos (1955), 269 Wis. 478, 492,

493, 69 N. W. 2d 598. As reflected in their vote to per-

App. 27

mit ‘‘MEI”’ to enter into the partnership agreement with

Isaacson, the trustees construed the trust agreement

when read on the whole to permit such authorization for

land sales on their part. Similarly, the trial court’s de-

cision stated that ‘‘[n]o attack is made by anyone on the

good motives of the trustees.’’

The trial court’s conclusion and the plaintiffs’ argu-

ment on appeal revolves around what all parties recog-

nize to be the basic concept of this and other voting

trusts; namely, that the trustees vote the shares which

they hold as an undivided unit. Consequently, they argue

that the words ‘‘holders of two thirds of the outstanding

shares’’ contained in art. XII becomes functionless when

applied to the trustees since each has an interest in all

of the shares. In order to secure trustee approval under

that provision, the board of directors of ‘‘MEI’’ must

obtain a unanimous decision from all the trustees, else

not one share will have been voted. This, however, will

automatically include 100 percent of the shares and thus,

it is impossible for the voting trustees to vote two thirds

of the outstanding shares on any matter since individual

trustees do not hold divisible amounts of stock. There

is but one stock certificate representing this common

trust and all the trustees hold all the stock. All must

agree or not one share can be voted in approval of land

sales. It is undisputed that the voting trustees unani-

mously approved land sales to non-Menominees.

As already pointed out, the holders of the shares dur-

ing the existence of the voting trust were the voting

trustees. While it is true that the language contained in

art. XII may have no effect while the trust is still in

existence and while the shares are being voted as a unit

by the trustees, it will have a clear and unambiguous

App. 28

meaning after the trust no longer exists; an eventuality

which was within the contemplation of all of the parties

at the time the plan was adopted.

We conclude that the trial court in holding art. XII

of the articles of incorporation ambiguous was in error.

Conveyance of land from ‘‘MEI”’ to ‘‘LOM”’.

In a supplemental decision, occasioned by orders to

show cause brought by the defendants, the trial court

held that certain lands conveyed to ‘“*LOM”’ by the ap-

proval of the trustees and which were subject to the

plaintiffs’ lis pendens, could be enjoined from further

sale in spite of the rule that an executed conveyance,

even though made in an irregular manner, will not or-

dinarily be upset because of the irregularity. The court’s

ruling was clearly premised on its belief that art. XIT

was ambiguous and that only enrolled Menominees could

authorize the sale of land to non-Menominees.

Since the trial court was in error on its original prem-

ises, it was likewise in error to enjoin the sale of land

held by ‘‘LOM.”’

By the Court.—That part of the interlocutory judg-

ment which held the voting trust valid is affirmed, Those

parts of the judgment which held art. XII of the articles

of incorporation ambiguous ; which interpreted that only

enrolled Menominees could approve land sales to non-

Menominees; and which enjoined the future sale of the

land held by ‘LOM’? are reversed.

B rpoaee

App. 29

STATE OF WISCONSIN : IN SUPREME COURT

Henry L. Tomow, Sr., et al.,

Plaintiffs-Respondents,

Menominee Enterprises, Inc., et al.,

Defendants-Respondents,

N. E. Isaacson & Associates, Inc.,

Defendant-Appellant,

No, 508

OPINION ON MOTION FOR REHEARING

(Decided August 14, 1973)

PIR CURLAM (On motion for rehearing). It is urged

that the opinion of the court, in connection with the

number of trustees necessary to cast a vote, can be con-:

strued to mean that there must be a unanimous agree-

ment of all the trustees of the voting trust to vote the

stock they hold. If this construction can be drawn from

the opinion, it is withdrawn. As noted in the opinion,

the Trust Agreement in the plan provided the trust could

act upon the affirmative vote of five of the seven trustees.

This provision of the Trust Agreement was subsequently

amended to provide an affirmative vote of seven trustees

was required. This was done to accommodate this same

amendment which increased the number of trustees from

seven to eleven. Thus, as the Trust Agreement now pro-

vides, seven affirmative votes of the eleven trustees are

sufficient to vote the entire stock held by the voting trust

to approve the sale of land to non-Menominees.

Motion denied without costs.

App. 30

APPENDIX B

STATE OF WISCONSIN CIRCUIT COURT

MENOMINEE COUNTY

Case No. 33

HENRY L. TOMOW, SR., et al.,

Plaintiffs,

vs.

MENOMINEE ENTERPRISES, INC.,

et al.,

Defendants.

DECISIONS ON MOTIONS

(October 26, 1972)

Subsequent to this Court’s decision in the above matter

on July 24, 1972, two motions were brought on by orders

to show cause. These sought to clarify and limit the

injunction which was authorized in the decision. I have

now had all of the briefs of counsel and will attempt to

deal with questions posed by these motions.

It was agreed at the time of the hearing on these mo-

tions that there were 121 sales in which offers of pur-

chase had been accepted, but the delivery of deeds and

the formal closing had not occurred. In six of these

sales the offer and acceptance had occurred prior to Octo-

ber 24, 1971, which was the date of the filing of the lis

pendens in this action. A very substantial amount of

money estimated by counsel at close to $900,000 is in-

volved in these contracts of sale. Counsel for Isaacson

relies on a well-understood principle of law that an exe-

cuted conveyance even though made in an irregular man-

ner will not ordinarily be impeached or disturbed hecause

of any irregularity in the exercise of an unquestioned

power of the corporation. Section 180.04 and 180.06 are

App. 31

cited as supporting this position. Counsel's position is

stated as follows:

“Clearly, under Section 180.04, Wisconsin Statutes,

and under the Articles of Incorporation, Menominee

Knterprises, Inc, had the capacity and power, as a

corporation, to make conveyances of land to anyone.

‘It has long been the law in Wisconsin that even

an ultra vires contract of a corporation will not be

impeached or overturned when that contract is fully

executed. The above-quoted case state this rule.

“This rule has also been codified in Section 180.06,

Wisconsin Statutes, which permits a court to enjoin

only executory ultra vires contracts.’’

Counsel makes the further point that even though the

irregularities in this case may not be strictly speaking

ultra vires acts that the same result would oceur citing

Blue River Company vy. Summit County Development

Corporation, 207 F.Supp. 283. The Court in this case

quoted Fletcher, Cyclopedia of Corporations, §3402 as

follows:

***Another class of corporate contracts which are

sometimes said to be ultra vires, although the phrase

as applied to them is inaccurate, is where the power

exists to do what was done, provided the corporation

(oes it in a certain preseribed way. In other words,

the irregular exercise of an unquestioned power of

the corporation is not ultra vires. Thus, informalities

in connection with consent of stockholders to the con-

tract are often incorrectly referred to as ultra vires,

using the tern in its strict sense, The fact that the re-

quired consent of stockholders is not obtained does

not make a contract ultra vires.’ ’’

Counsel for the plaintiffs also cited 180.06(1) for the

position that the pending sales may be enjoined. This is

the section which provides that in a proceedings by a share-

2 Og:

‘mg

‘

App. 32

holder the Court may set aside or enjoin the performance

of a contract and at the same time allow compensation for

certain damages. It would seem the whole question hinges

on whether the transfer of 5,170 acres of land by seven

warranty deeds by Menominee Enterprises, Inc. to the

Lakes of the Menominees, a partnership, has the effect of

a completed or executed transaction. These deeds were

recorded prior to the lis pendens. I have concluded that

they are not entitled to this standing in the law since Me-

nominee Enterprises, Inc. was one of the partners. The

deeds were not final acts but part of an overall joint ven-

ture for the sale of these lands to persons seeking to pur-

chase them as cottage sites. In other words it is my judg-

ment that from this standpoint the transfer of the land

to the partnership in accordance with the agreement for

the sale of this land does not substantially alter the result.

I am of the opinion that the test whether or not the mat-

ter is a completed transaction or executory has to be ap-

plied with respect to the ultimate purchasers and not to the

conveyances to the partnership. Counsel also argues that

what this Court has done is to reform the written instru-

ments to reflect the intent of the parties rather than in-

terpret the writings. Assuming this is correct and that it

may have an effect on the ultimate result, I don’t think it

would change the application of the lis pendens considera-

tions.

LIS PENDENS

I am of the opinion that the lis pendens which was filed

in this matter has the effect of making all subsequent pur-

chasers subject to the legal proceedings in this case. At

the time of the argument I had indicated that I considered

that a distinction existed with respect to the six sales in

VET IRS ENN FG FN MTEL ae OB ES

PSSM OE a

App. 33

which the offers had been accepted prior to the filing of

the lis pendens. The case of J and S Corporation v. Mort-

gage Associates, Inc., 41 Wis. 2d 418, casts doubt on this

distinction. It may be that the time of the recording of the

interests of these purchasers is the significant time. The

Court in the J and S Corporation case, supra said at page

423:

‘‘The statutes makes immaterial the time when the

holder of the unrecorded conveyance or encumbrance in

fact received his interest.’’

For the purpose of this injunction, however, I have de-

cided to exclude these particular transactions although the

purchasers themselves may wish to proceed with some

caution.

SALES TO MENOMINEES

Counsel has called the attention of the Court to the fact

that a question has been raised as the result of this deci-

sion in regard to sales by the corporation to Menominees.

This decision, of course, does net affect these sales in any

way. In my view of the case which considers the plan and

its implementation to be valid in every respect, I can see

nothing that would in any way challenge the validity of

sales to Menominees.

SETTLEMENT AGREEMENT

Counsel makes a very persuasive argument that this

Court ought to permit the orderly settlement reached by

some of the parties to this case to take its course. This

agreement (made part of the record by affidavit) was en-

tered into on July 9, 1972, prior to the decision in this case

} ess

150 SO Ghee ae

DEAN OEE ATEOLS Bri EE ata ree

App. 34

but subsequent to the trial. It excludes this litigation. 1 am

always aware of the desirable nature of a good settlement

and recognize that many times it produces a better result

than a disposition which follows the logic of the law. As-

suming, however, that I am correct in my major premise

as I must do, I do not see where I have any right to do more

than to suggest or recommend a settlement.

PROSPECTIVE APPLICATION

Counsel has also urged that this Court apply its ruling

prospectively only permitting all transactions which were

entered into prior to the date of the decision to stand. The

leading case of Great Northern Railroad Company v. Sun-

burst Oil and Refining Company, 287 U.S. 358, is cited for

this approach. Linkletter v. Walker, 381 U.S. 618, and Gott-

licb v. Milwaukee, 33 Wis. 2d 408 are also cited as more

recent applications of this rule of law which limits retro-

active application of a principle of law to avoid undue hard-

ship. I am not sure that these cases which involve consti-

tutional interpretations apply, but in any event, I believe

that as a trial Court I ought not to adopt any such remedy.

CONFUSION RESULTING FROM THE DECISION

I would be of the opinion that it would be better for

counsel to attempt to advance the case on appeal than to

have the Court adopt some of the other suggestions to avoid

unnecessary hardship to the interested parties. I can well

understand the concern of counsel in this matter that an

appeal of this case may result in a different result.

I would suggest to counsel that I would be glad to meet

informally with them to expedite the making and signing

of findings of fact and conclusions of law. One thing I

App. 35

have noted is that some of the delays that have occurred

resulted from waiting for exchange of briefs and authori-

ties in the matter. I am concerned, of course, about the ex-

tent to which the decision may affect a large number of

people. I am mindful too of the most regretable and un-

necessary inconvenience to many persons which would re-

sult if the Supreme Court would reach a different decision

on the basic question in the case. I will, therefore, make my-

self available at the earliest possible time that counsel wish

to get out the findings of fact and conclusions of law.

Counsel at the time of the hearing on these motions for

clarification have discussed some of the remaining aspects

of this case which would have to be resolved eventually. I

would prefer not to deal with any other remedies. It is my

hope that the basie question could be resolved finally be-

fore anything further is done by this Court which would

affect the rights of persons in these lands.

Dated this 26th day of October, 1972.

BY THE COURT:

/s/ William J. Duffy

Cireuit Judge

‘

ERIE. TO Sa, CES TR OS

PE AEGRIIES HRs LITRE PI h Le

App. 36

STATE OF WISCONSIN CIRCUIT COURT

MENOMINEE COUNTY

Case No. 33

HENRY L. TOMOW, SR., et al.,

Plaintiffs,

vs.

MENOMINEE ENTERPRISES, INC., et al.,

Defendants.

DECISION

(July 24, 1972)

FACTS

Counsel have stipulated to many of the facts in the

formal stipulation covering 24 paragraphs, Most of the

facts are agreed to, and only in a relatively narrow area

is there a dispute.

The Menominee Indian Tribe was well established in

Wisconsin 200 years prior to the appearance of the Kuro-

pean settlers. Except for a small cession of land to the

Stockbridge-Munsee Reservation, the last of a series of

treaties between the United States and the Menominee

Tribe occurred in 1854, “The Treaty of Wolf River.”’

Under the treaty the Menominees ceded land to the United

States, and the United States agreed to give to the Menomi-

nees the land on whieh the present Menominee County is

laid out. Until termination, which became effective on

April 30, 1961, tribal affairs were conducted by the Gen-

eral and Advisory Councils. The General Councils were

ineetings open to the entire tribe with all adult enrolled

Menominees being able to vote. The Advisory Council

created in 1928 was an elected body concerned primarily

App. 37

with the business management of day-to-day affairs. Its

actions could be overturned by a vote of the General Coun-

cil or by the Secretary of the Interior.

In 1953 Congress by concurrent resolution instructed

the Secretary of the Interior to recommend legislation for

the withdrawal of the federal supervision over the Menomi-

nees as well as other named tribes. In 1954 Congress passed

the Termination Act, P. L. 399, 25 U.S.C.A. 892-902. It

was later amended on July 14, 1956, July 2, 1958 and Sep-

tember 8, 1960.

In November, 1957, a General Council of the tribe created

the Coordinating and Negotiating Committee, hereinafter

referred to as the C and N Committee, Its purpose was

to develop a termination plan under the authority from the

General Council which created it. In December of 1957 the

final roles of membership in the Menominee Tribe were

closed, and the membership list of 3,270 persons was pub-

lished in the Federal Register. A ‘*Termination Plan’’ was

proposed to the General Council in a series of three meet-

ings in January of 1959. As amended by those present, the

plan was approved by a vote of 91 to 16 on January 17,

1959. Details for the implementation of the plan were

contained within the plan itself.

The opening language of the plan reads as follows:

‘The Plan consists of the following documents:

1. Statement of the Plan and Description of its

Objectives and Goals (revised December 1, 1960).

2. Articles of Incorporation of Menominee Enter-

prises, Inc. (vevised November 30, 1959).

3. By-Laws of Menominee Enterprises, Ine. (re-

vised November 30, 1959).

4. Menominee Common Stock and Voting Trust

(revised November 30, 1959).

App. 38

5. Menominee Assistance Trust (revised November

30, 1959).

6. Menominee Enterprises, Inc., Bond Indenture

(form of bond included) (revised November 30, 1959).

7. Menominee Indian Tribe, Certificate of Bene-

ficial Interest.

‘In addition the following documents are included

by reference:

1. Resolution of General Council, Menominee In-

dian Tribe, January 17, 1959.

9. Resolution of General Council, Menominee In-

dian Tribe, July 27, 1959.

8. Resolution of Advisory Council, Menominee In-

dan Tribe, July 28, 1959.

4. Letter of Glen A. Wilkinson, Attorney for Tribe,

to Seeretary of Interior, July 31, 1959.

5. Letter from Acting Seeretary of Interior to

James G. Frechette, Chairman, Menominee Advisory

Council, July 31, 1959.

6. Letter from Acting Secretary of Interior to

James G. Frechette, Chairman, Menominee Advisory

Council, October 30, 1959.

Ga. Letter from George W. Abbott, Assistant See-

retary of Interior to Jerome Grignon, Chairman, Me-

nominee Advisory Council, January 9, 1961.

7. Copies of Chapters 258, 259 and 260, Laws of

Wisconsin, 1959.”

Pursuant to the plan, the trustees were elected by the

General Council. The members of the @ and N Comittee

as incorporators of Menominee Enterprises, Inc., herein-

after referred to as MEI, subscribed to all of the stock in

MEL The directors whose names appeared on the article,

who had been previously chosen informally, were formally

chosen by the trustees. The directors accepted the sub-

seription of the committee, The Secretary of the Interior

App. 39

advanced $327,000 of the funds he was holding in trust,

and that money was used to pay for the stock. The corpora-

tion issued a single stock certificate to the C and N Comnmit-

tee for 327,000 shares of stock. The committee signed the

Voting Trust Agreement and named as trustees those indi-

viduals previously approved hy the General Council and

transferred the stock in MEI held in their name to the Vot-

ing Trust. The trustees then issued certificates to enrolled

Menominees as evidence of their interest in the stock the

trustees held,

On August 10, 1967, the Board of Directors and the

trustees jointly passed a resolution which reads as follows:

“WHEREAS, there is no other means sufficiently

capable of accomplishing the economic improvement

of the Menominee community except by adoption and

implementation of the Ernst & Krnst Report; and

“WITEREAS, to provide necessary tax resources for

Menominee County and/or the Town of Menominee

and for the relief of taxation on Menominee Enter-

prises, Inc, (and the residents of Menominee County,

Wisconsin), and to assure continued Menominee own.

ership thereof ;

“7, BE IT RESOLVED, that Menominee Enter-

prises, Ine, is authorized to proceed with the recom-

mendations of the Ernst & Ernst Report as opportunity

and feasibility permit; and

“TT. RESOLVED FURTHER, that the corpora.

tion is authorized to define economic development

zones on its land in Menominee County, Wisconsin,

not to exceed 8,760 acres in areas to be defined and

deseribed from time to time by the Menominee Com-

non Stock & Voting Trust and/or the shareholders

of the Corporation, whichever then holds the common

stock; and

SEC ee

See

Sis hane ryt 4

App. 40

“TIT, RESOLVED FURTHER, that pursuant to

Article XII of the Articles of Incorporation of Menomi-

nee Enterprises, Inc. within such economic develop-

ment zones warranty deeds may issue as a form of land

transfer, provided a sufficient form of quality control

is a condition of such transfer, and provided always

that sufficient areas of land on lakeshore be reserved

for Menominee use.”’

On September 28, 1967, a referendum was held, and all

holders of Voting Trust Certificates were invited to express

their opinions. Of a total of 109,125 votes cast, 97,738 were

for and 11,887 were against the resolution, Among. the

‘tyes’? votes were 79,362 votes cast by First Wisconsin

Trust Co. which yoted the interests of minors and incompe-

tents. The referendum was announced as “advisory,” and

the written material distributed referred to the use of war-

ranty deeds.

On July 9, 1968, MEL and N., BK. Isaacson and Associates,

hereinafter referred to as Isaacson, entered into a joint

agreement calling themselves Lakes of the Menominees,

hereinafter referred to as LOM. They planned to develop

and sell to persons including non-Menomineces certain lands

situated in that part of the economic zone and approved

for development. The joint venture agreement was subject

to the approval by the trustees which was given by unani-

mous resolution in July of 1968. In 1969 Tsaaeson and M KI

agreed to increase the number of lots to be developed and

sold from 1,800 to 2,600.

On February 4. 1972, ata Board of Directors meeting,

the legal status of the LOM contract was raised, The

original agreement stated that it dissolved as of Deeember

1. 1971, unless extended by the parties. At a reconvened

App. 41

meeting of the Board of Directors on February 11th, it was

decided that the executive committee would meet with Isaac-

son to explore the possibility of negotiations on a contract.

On March 17, 1972, the Board of Directors voted in favor

of continuing the LOM contract to December 31, 1972. The

presidentof MII thereupon confirmed the extension in

writing to Isaacson which agreed to the extension. Since

December 31, 1972, no action was taken by certificate hold-

ers or trustees concerning land sales to non-Menominees.

In April, 1972, six trustees out of eleven signed affidavits

at the request of Plaintifi's’ counsel that they opposed the

sales to non-Menominces. If a vote were taken, they indi-

cated they would vote against such sales.

The original pleadings were amended to set forth these

facts and to allege a lapse of the contractual relationship.

A motion for a temporary injunction against any further

sales was denied by this court in a decision dated the 24th

of April, 1972.

The Termination Act, 25 U.S.C.A,, contains the follow-

ing language ;

25 U.S.C.A. 893

‘

‘... the rights or beneficial interests of each person

Whose name appears on the roll shall constitute per-

sonal property and shall be evidenced by a beneficial

interest which shall be issued hy the tribe. Such in-

terests shall be distributable in accordance with the

laws of the State of Wisconsin. Such interests shall

he alienable only in accordance with such regulations

as may be adopted by the tribe,”

App. 42

95 U.S.C.A. 896

“The Seeretary shall accept such tridal plan as the

basis for the conveyance of the tribal property if he

finds that it will treat with reasonable equity all mem-

bers on the final roll of the tribe prepared pursuant

to Section 893 of this title, and that it conforms to

applicable Federal and State laws.”’

Others facts will be mentioned in the decision.

SSUES

This suit is by 162 Menominees against Menominee Kn-

terprises, Ine, and the officers and directors of Menominee

Enterprises, Ine., and the trustees of the Menominee Com-

mon Stock and Voting Trust and Isaacson, a partner with

Menominee Enterprises, Ine. in the Legend Lake Develop-

ment,

Plaintiffs contend that the Voting Trust was not set up

pursuant to Section 180.27, Wisconsin Statutes, which

reads as follows:

“Any number of shareholders of a corporation may

create a voting trust... by entering into a written

agreement . 647’ (Section 180.27 W.S.A., App. p. iii)

Plaintiffs’ also contend that the trustees did not have

the power or the authority under Article XII of the Articles

‘ of Incorporation to authorize the sale of lands to non-

Menominees. In the amended complaint ‘referred to above,

plaintiffs also vontend that even if the LAM agreements

—

were originally valid that due to the automatic termination

‘ of the agreement and the present make-up of the trustees

i there was no longer any authority for the sale of land after

¥ December 31, 1971,

as hee et

App. 43

The defendants contend, of course, that the trust was

validly set up and that Article XII was complied with by

the unanimous vote of the trustees and that the failure to

take action prior to the termination date established in the

contract was cured by action taken afterwards and proper-

ly ratified, Defendants also take the position that the main

issues raised by the plaintiffs are res judicata as the result

of two earlier circuit court cases,

ISSUK OF RES JUDICATA

The two cases on which defendants rely are White, et

al. v, Kenote, et al. and Lakes of the Menominees vy. A gnes

Dick, et al, both Menominee County Cireuit Court cases.

In the White case, the trial court dealt with certain provi-

sions of the Voting Trust and the Assistance Trust as they

related to the holding of an election to determine whether

the Voting Trust should be renewed pursuant to Article

XII paragraph 2 of the Voting rust Agreement.

The decision of that court assumes the validity of both

the Voting ‘Trust and the Assistance Trust which in the

argument of the defendants has the effect of making this

matter res judicata since the validity of the trust could

have been raised at the time of the trial. In my view of

the law, the Voting Trust is valid. Therefore, this issue

is not dealt with at length. However, in the presentation

of the case, | attempted to permit counsel to make as com-

plete and full a record as each felt they should.

In the Lakes of the Menominces case, individual members

of an organization called DRUMS were enjoined from

picketing the business office of the Legend Lakes project

of LOM. Some of them are plaintiffs here. I doubt very

seriously that the issue of the authority of the trustees to

App. 44

vote for the sale of lands to non-Menominees would be prop-

erly litigated in that matter, In my judgment it would be

collateral and not necessary to the plaintiffs’ case, The

trial court indicated he had not made a study of the title

issue although he indicated he would approve a finding of

title in LOM. (Exhibit 25, page 40) In his findings of fact,

he found that the LOM had deeds from MEI, In his con-

clusions of law, he does not mention title.

The principle of res judicata applies when a prior law-

suit has involved indentity of the thing sued for, identity

of the causes of action, identity of the parties and the quali-

ty and capacity in which they appear in the litigation, Gohr

v. Beranek (1954) 266 Wis. 605, 609, 64 N.W, 2d 246; ¢ ‘ohan

y. Associated Fur Farms, Inc, (1952) 261 Wis. 584, 598, 58

NW. 2d 788, 795; and Conway v. Division of Conservation

(1971) 50 Wis. 2d 152, 160, 183 N.W, 2d 77.

I have concluded that this case cannot be decided on the

principles of res judicata because the issues as well as the

parties are substantially different.

ISSUE OF THE VOTING TRUST

Defendants make a very urgent argument that the failure

to follow the statutory requirements of Section 182.07 is

contrary to the Termination Aet which provides in part as

follows :

that it conforms to applicable Federal and State

laws.”’

App. 45

Defendants make the point that this section of the Wis-

consin Statutes is a codification of the common law rule

that voting trusts must be in writing to comply with the

Statute of Frauds,

Plaintiffs’ counsel cites a number of precedents from

different jurisdictions Which, in effect, do indicate that

courts have been concerned with the manditory nature

of the compliance with similar statutes, ‘These cases sug:

Best that public policy considerations are involved which

would be in addition to the Statute of Frauds purposes,

It is my judgment that neither the purposes contemplated

by the Statutes of Frauds or the public policy considera.

tions raised by plaintiffs are involved here, The plan

clearly contemplates the procedure which was actually

followed. As defendants’ counsel points out, the mem.

bers of the C and N Committee signed the written agree.

ment of trust in accordance with the plan. The plan also

provided for the transfer of the shares of stock to the

trust sometimes in advance of termination even before

the corporation owned the assets of the Menominee Tribe,

Plaintiffs’ counsel in answer to this points out that in

the legislation passed in 1954 establishing the Menomi-

nee Rolls cach Menominee was given a vested interest.

From this fact counsel argues that a proper compliance

with Section 180 would require a written consent of each

holder of such interest. Tt is my judgment that this

cian f

App. 46

literal interpretation is probably overtechnical. I am im-

pressed by the reasonableness of the method established

in the plan contrasted with the unwieldy procedure of

having the shares issued to the individual Menominees

some of whom would be minors or incompetents and then

placed in trust under the procedural requirements of Seec-

tion 180.27. It is obvious that a trust arrangement was

considered in the best interests of the Menominees in

accordance with their own plan. It seems to me the pro-

cedure adopted to accomplish this was eminently sensible.

I cannot conclude that the plan approved by the Secre-

tary of the Interior fails because it violates applicable

state law in this respect.

It is my judgment, therefore, that the Voting Trust

is not invalid for a failure to comply with Wisconsin law.

I should note that plaintiffs contend that other individuals

in Wisconsin would not be bound by a voting trust agree-

ment which failed to follow this statute and that, there-

fore, there is a violation of the Fourteenth Amendment

its jurisdiction the equal protection of the laws.’’

stage

Also defendants claim that the Fifth Amendment to

the Federal Constitution is violated: ‘*. . . nor shall any

person .. . be deprived of life, liberty or property, with-

out due process of law. .. .”

hu kat RL i ee ae eee a

se ai Oe Me al OC

POWER OF THE TRUSTEES TO VOTE THE

SHARES AUTHORIZING THE SALE OF LAND

Parol Evidence Rule

Defendants claim throughout that the authority of the

trustees is contained within the four corners of the writ-

ten instruments comprising the plan; that there is no

ambiguity and consequently no basis for the reception

App. 47

of parol evidence. Pines y. Perssion, 14 Wis. 2d 590, 594,

11 N.W. 2d 409 (1961); Hart v. Hart, 117 Wis. 639, 648-

649, 94 N.W. 890 (1903).

Defendants’ counsel further argues that the parol evi-

dence rule operates with special force when the meaning

in a federal statute or regulation is at issue.

‘“‘The legislative will must be ascertained from the

text of a statute if the words are clear and plain and

the whole enactment internally cohesive.’ Fisher

Flowing Mills Company v. United States, 270 F.2d

27, 30 (9th Cir. 1958).

It is pointed out that the language in the trust agree-

ment uses the words, ‘‘holders . . . entitled to vote there-

on.’’ Attention is also drawn to Article III of the Trust

Agreement which states that the stock held may be voted

without limitation except as expressly provided. Em-

phasis is placed by defendants’ counsel on the language

contained in paragraph one of Article X of the Trust

which provides as follows:

“The Trustees may construe this agreement, and

their construction made in good faith shall be con-

clusive and binding upon the parties hereto. . .”

Counsel for the plaintiffs on the other hand insist that

extrinsic evidence is admissible to show the intent of

the parties hecause there is an ambiguity contained in

the writings. Their brief makes this statement:

‘“**Holders of two-thirds of the outstanding shares’

becomes functionless when applied to the trustees.

Each has an interest in all the shares. In order to

obtain trustee approval under that provision, the

Board must get a unanimous decision from all the

trustees thereby automatically including 100 percent

of the shares. Or does it mean two-thirds of the

holders?’’

_—— eae

(bis POET ETA TI Ss

App. 48

Still another interpretation in addition to the two men-

tioned in the paragraph quoted above is the third and

probably more logical one that a simple majority of the

trustees could authorize the sale of real estate if this

authority granted in this article can be exercised by the

trustees. At the time of the adoption of the pertinent

language in Article XII, there was a provision for only

seven trustees. This was subsequently changed to eleven,

I have concluded that the language is ambiguous as it

relates to the interum period during which time the

trustees held the voting shares. The situation in. April

of 1972 when six of the eleven trustees signed an affidavit

that they would oppose the sale of lands to non-Menomi-

nees highlights the problem of interpretation.

The parol evidence rule excludes extrinsic evidence un-

less the writing is ambiguous, unclear, indefinite or con-

tradictory.

“In determining whether a writing is ambiguous, the

court does not merely examine the document, but

serutinizes the language of the document in light of

the surrounding circumstances, Consequertly, paro!

evidenee must at least be provisionally admitted in

order to develop: these circumstances, If the court

eoneludes that on the basis of such extrinsic proof a

reasonable man could interpret the writing to mean

anything other than what the ordinary meaning of the

words indieate, then parol evidence may he received

to establish what was meant by the writing. Or if the

parol evidence shows that a literal application of the

language of the writing would lead to an absurd result,

the extrinsic proof may be relied upon to arrive at a

rational construction of the writing which effectuates

what appears to have been the intention of the par-

ties? Wisconsin Civil Trial Evidence $9.31 Determin-

ing Existence of Ambiguity.

° EPONA GEE MEP TLE IIIS B10 PE RNS FERNS LATER OEY ERG, SS PEE AIR IM, a

App. 49

In the course of the trial, extrinsic evidence was per-

mitted over objection of counsel for the defendants which

I believe was procedurally the correet method to follow.

‘*(2) Procedural Aspects of Application of Rule.

The parol evidence rule may be the basis for reject-

ing evidence when it is offered, or for refusing to

consider evidence, which has been received, from the

ultimate decision at the end of the trial. Frequently,

the court is unable to determine whether the parol

evidence rule should be applied until sufficient ex-

trinsic evidence has been developed in the record.

Regardless of when the rule is applied, however, the

critical question is whether the writing expresses the

complete and correct integration of the terms on

Which the parties agreed,” Wisconsin Civil Trial

Evidence $9.14 Substantive and Procedural Aspects.

1 am aware that the decision Whether to admit extrin-

si¢ evidence involves a judgment to be made by the trier

of facts. I am aware that this brings into play a number

of considerations on which reasonable people can differ.

Certainly in this case they have differed. Counsel for

the defendants have argued throughout that I avoid mak-

ing a decision on rhetorie. Underlying our discussions

was an appreciation of the fact that American history

is replete with instances where the Indians have clainued

that land was wrongfully taken from them. I would not

be candid if I indicated that this was not a concern of

this Court. At the same time | did make an effort to

separate this general proposition from the statements

and actions of the individuals in this case in an effort on

my part to find out what the true intent of the Menomi-

nees was with respect to the sale of land.

Ordinarily our law does not favor restrictions on alien-

ation, and a proper construction of the trust agreement

would probably place the power of sale in the trustees.

SEN HAN ey y rere WR Re TONSA OR tag? SONGS TB PPTL POLL AL EL AE DL ETE LIL IEC M ILE.

App. 50

However, I consider that this is not an ordinary trust

agreement but one that requires a consideration of the

background and an interpretation of the plan against the

proper setting. I cannot escape the conclusion that the

systematic sale of these lands for purposes of obtaining

revenue with the additional purpose of building a tax

base was not within the contemplation of the Menominees

at the time of the adoption of the plan.

Intent

On the question of the intent to be found in the plan,

I start with the proposition that it is basically the plan

of the Menominee Indians. The Secretary of the Interior

approves of the plan under the federal statute if it meets

certain conditions. I am of the opinion that to determine

the intent of the framers of the plan that the minutes of

the tribal meetings as well as the minutes of the Advisory

Council and the C and N Committee were all proper and

competent evidence.

I find from a reading of the minutes of the General

Council of November 6th and 7th, 1957, and minutes of

the Advisory Council of January 3, 1997, that the council

retained authority over the C and N Committee. Minutes

of the meeting of August 14, 1958, (Plaintiffs’ Exhibit

No. 7) indicate at the outset a deep concern that the land

would get into the hands of outsiders. An informal vote

resulted in voting for leases only at that time and a small

number for a combination of leases and sales with op-

tions to repurchase. At a General Council meeting called

for January 9th and 10th, 1959, Article XII was origi-

nally presented reading as follows: (Plaintiffs’ Exhibit

No. 9)

“Unless otherwise authorized by the affirmative vote

of the holders of not less than two-thirds of the out-

standing shares of stock entitled to vote thereon, the

REO RPE Re REAR TOL ENON ND

App. 51

corporation shall have no authority to sell, exchange,

assign, convey or otherwise transfer all or any por-

tion of the real property owned by the corporation,

other than real property designated by the board of

directors as forest lands; provided, however, that

the board of directors, or the appropriate officers at

its direction, shall have authority to lease, mortgage

or pledge ail or any portion of such property, on

such terms and conditions as it shall deem advis-

able, without shareholders’ consent.’’

In the meetings of both January 9th and 10th, 1959,

challenges were made to giving the Board of Directors

power to sell land. All of the expressed sentiment was

against sales of any land. No one spoke in favor of any

limited or emergency sales. Even one to the State of

Wisconsin for park purposes was discussed adversely by

Mr. Gordon Dickie, a member of the C and N Committee

who was a witness in this case. The meeting was ad-

journed until January 17th when the chairman announced

there was no longer a quorum.

On January 17th Article XII was resubmitted in a form

which gave no power of sale to the Board of Directors

without approval of two-thirds of the shareholders. It

provided that the Board of Directors would have au-

thority to lease real property other than lands designed

as forest lands. This was the language approved by the

General Council on the meeting of January 17, 1959.

(Plaintiff’s Exhibit No. 11)

There was throughout the tribal discussions of Ar-

ticle XII a concern that individual Menominees should

be protected in the rights to the land that they had been

occupying. On April 14, 1959, the Advisory Council

passed a resolution to submit an amendment to Article

XII. An explanation was sent to individual Menominees

Sarna

aa, “eg

bs SPEARS rete Hen ERIE PRL IEE EL TONES i a . SEAN TREE SE

App. 52

suggesting that the Board of Directors be given the

power of sale to Menominees pointing out that represen-

tatives of the State of Wisconsin had objected to this

restriction on alienation. (Plaintiffs’ Exhibit No. 14)

At the January 17th meeting, Mr. George Kenote,

another member of the C and N Committee who testified

on behalf of the defendants in this case had explained

to the council that securring a two-thirds approval would

make it difficult to sell individual homesites.

The final language gave the Board of Directors this

authority instead of the leasing arrangements. The addi-

tional language read as follows:

‘« . . and provided, further, that the board of di-

rectors, or the appropriate officers at the direction

of the board of directors, shall have authority to

sell and convey to individuals, who were enrolled

tribal members under Public Law 399 (final roll) or

their heirs at law, individual parcels which in the

aggregate will not exceed 14,000 acres for home-

sites, agricultural use or other development, which

lands shall be zoned for that purpose and shall not

include lands designated as forest lands.’’

I found no discussion in any of the minutes as to

whether the trustees would have the right to exercise

the authority to sell contained in Article XI during the

period that the shares were in trust. I do find contained

in all these writings a strong, consistant opposition to

the sale of any lands even to the State of Wisconsin for

park purposes. Most of the plan was not discussed in

any depth. The attorney general in his report of the

plan (Defendants’ Exhibit No 35) complained of this.

Proportionately the sale of land was more thoroughly

discussed.

App. 53

No attack is made by anyone on the good motives of

the trustees. Evidence was offered by defendants to

show the serious financial troubles which beset the cor-

poration. There was a need for revenue and the advan-

tageous tax base created by the sale and improvement

of these lots. It is easy to understand how the trustees

were motivated to seek this solution to the financial

problems. Objection was made to the admission of this

evidence. I did consider this evidence, but I do not be-

lieve that it is persuasive with respect to the power of

the trustees to exercise the authority to sell.

Counsel for defendants point to the Attorney General’s

report as indicating that the power of sale was in the

shareholders. The exact language of the report reads

as follows: (Defendants’ Exhibit No. 35 p.4)

‘Sale of land is expressly prohibited except pursu-

ant to a vote of two-thirds of the stockholders who

should be the voting trustees for at least 10 years,’’

Counsel also points to a June 1, 1959, edition of the

Menominee News which was sent out to all tribal mem-

bers. This statement appears at page 16 of Defendants’

Exhibit 37:

‘*. .. but sale of land is prohibited unless two-thirds

of the stockholders vote otherwise, and in this case

the voting stockholders would be the voting trustees

for at least 10 years.’’

I consider these two statements can be reconciled as

readily on the basis of reassuring the Menominees as

alterting them to the probability of sale during the

period the stock was held in trust.

One other incident is cited by defendants’ counsel in

which then Attorney General John Reynolds asked one

ie i Cah ie ie es ia

one

wihts WRIA ted

SEASONS EMME Hr

App. 54

Jennie Wesso about land sales at a meeting held in

Keshena in April of 1959. She replied that a two-thirds

of the majority vote of the Menominee Tribe would be

necessary. Then Mr. Reynolds asked her if she under-

stood that the trustees would be voting the stock instead

of the tribe. She then indicated she did understand. 1

think this incident was significant because it was the

only written record of discussion of this kind, and it cer-

tainly is far short of indicating that even one Menominee

clearly understood that the land would be subject to sale

by the trustees.

Article XII is given the same dignity in the Articles

of Incorporation as Article X which provides that the

articles may be amended by affirmative vote of the holders

of at least two-thirds of the shares entitled to vote there-

on. It seems improbable to me that from all of the evi-

dence that one could conclude that the Menominees ever

intended that the trustees should exercise the power of

sale of lands as an ordinary business operation. It is in

my opinion out of harmony and out of character with all

of the expressed sentiments contained in the tribal min-

utes. Mr. Kenote and Mr. Dickie both testified to oral

conversations in which they explained this to individual

Menominees. I have decided to admit this evidence, but

its persuasiveness is far less than the writings.

I am most impressed by the deliberate selection of a

very difficult and involved machinery to authorize the

sale of land. Acquiring the consent of two-thirds of all

the shareholders is so different from the simple matter

of securring the approval of the trustees whether it is

unanimous, two-thirds or a simple majority. It also ap-

pears to me to involve a kind and a quality of consent

by the Menominee people which cannot be supplied by

App. 55

a few persons sitting as trustees no matter how consci-

entious and concerned they are for the well-being of the

beneficiaries for whom they are acting,

REMEDIES

At pretrial discussions, although I do not have a writ-

ten note of it, a procedure was discussed to permit the

Court to make a ruling on the legality of the sale of

lands without taking evidence in support of any of the

remedies other than the injunction. Even though this

was not reduced to a formal stipulation, the trial did

proceed on that basis. In arguinent counsel pointed out

the confusion that would ensue if the legality of titles

was challenged since many of the lots have been sold and

people have obtained rights in them. It should be pointed

out that this suit does not attempt to reach any of the

sales made earlier. The pleadings specifically exclude

earlier sales, | certainly do not intend to pass any judg.

ment on what should be the remedy with respect to any

land already sold prior to suit or since its commence-

ment. I do not believe I should consider this problem in

connection with deciding whether there was power to

sell,

Counsel have also acquainted the Court with a settle-

ment that was reached involving future sales of lots,

although it was never made part of this record and

probably should not be.

COUNSEL

I have appreciated the excellence of all counsel in this

case representing both plaintiffs and defendants. I have

received most helpful briefs. Their industry and candor

Was outstanding. I did not think I should pass up this

opportunity to compliment them.

is eal

ute AE EN

LNs oe

ow Be Ree

App. 56

Realistically I look forward, in the absence of a com-

plete settlement of this matter, to an appellate review of

this decision,

I would, therefore, limit my judgment with respect to

remedies at this time to the granting of an injunetion

against any further sales of lands with the understand.

ing that jurisdiction would be retained to consider evi-

dence in support of other remedies at a later date,

Counsel for the plaintiffs may prepare findings of fact

and conclusions of law in accordance with this decision,

Dated at Green Bay, Wisconsin, this 24th day of July,

1972,

BY THE COURT:

/s/ William J. Duffy

William J. Duffy

Cirenit Judge

a Oe

App. 57

APPENDIX 0

STATE OF WISCONSIN CIRCUIT COURT

MENOMINEK COUNTY

Case No, 33

HENRY L. TOMOW, SIt., et al,

Plaintiffs,

VB,

MENOMINED ENTERPRISES, INC,, et al,

Defendants,

FINDINGS OF FACT AND CONCLUSIONS OF LAW

(Issued: Nov, 16, 1972)

This ix a Menominee County action, commenced by

162 Plaintiffs who are either sharcholders and/or holders

of voting trust certificates, and Who brought this action

in the right of the Menominee Enterprises, Inc,, being

shareholders of not less than three percent (39%) of the

MEI shares issued and outstanding ;

A summons and complaint were filed in the Circuit

Court for Menominee County, Wisconsin on October 25,

1971, and a Lis Pendens containing the names of the

parties, the object of the action and a description of the

land involved in the action was filed with the office of

the Register of Deeds in Menominee County on October

25, 1971;

On November 11, 1971, the Defendants, other than

Georgianna W. Ignace and Ada Deer, moved the court:

1, For an order granting them summary judgment

dismissing Plaintiffs’ complaints on those merits;

App. 58

2. In the alternative, for an order advancing the case

on the calendar for trial in accordance with Wis. Stats.

§270.12(2).

On November 18, 1971, an Affidavit of Prejudice was

filed, and, subsequently, by Order of the Wisconsin Su-

preme Court dated November 24, 1971, I, William J.

Duffy, Cireuit Judge, Branch If, for the Fourteenth

Judicial Cireuit Court, was assigned to act in the matter

in the Tenth Judicial Cireuit;

On November 19, 1971, the Defendants, other than

Georgianna W. Ignace and Ada Deer, filed an answer to

the complaint;

On November 19, 1971, the Defendants, Georgianna W.

Ignace and Ada Deer served and filed identical answers

to the original complaint where they admitted each and

every allegation of the original complaint ;

On December 10, 1971, the motion for summary judg-

ment and in the alternative to advance the case for early

trial was argued and on February 7, 1972, the motion

for summary judgment was dismissed ;

On April 21, 1972, a hearing was held by the Court on

Plaintiffs’ motion requesting a temporary injunction pro-

hibiting sale of land to non-Menominee while the action

for permanent relief was pending. The Court denied

Plaintiffs’ request on April 24, 1972;

On April 21, 1972, a hearing was also held by the Court

on Plaintiffs’ motion requesting leave to file a Supple-

mental Complaint which was approved by Stipulation

on said date. The Supplemental Complaint alleged facts

material to the case which occurred after the complaint

was made, and added Carol Dodge, Gordon Keshena, and

App. 59

Robert Deer as Defendants to the action as a result of

subsequent elections which elected Carol Dodge as trustee

and Robert Deer and Gordon Keshena as directors of

Menominee Enterprises;

Copies of the Summons, Complaint, and Supplemental

Complaint were served on Carol Dodge, Gordon Keshena,

and Robert Deer. The three new Defendants did not

file answers to the original Complaint or to the Supple-

mental Complaint;

On May 2, 1972, an answer to the Supplemental Com-

plaint was filed on behalf of the Defendants other than

Georgianna W. Ignace and Ada Deer.

The Defendants Georgianna W, Ignace and Ada Deer

did not file an answer to the Supplemental Complaint

although a Supplemental Complaint was served upon

their Attorney, J, Edison Woods, of Madison, Wiscon-

sin, This action came for trial to the Court, without a

jury, on the 8th day of May, 1972. A Stipulation was

entered into by the parties, The Plaintiffs appeared by

their Attorneys, Ruth S$, Downs and Warren A. Kenney

of the Wisconsin Indian Legal Services of Madison, Wis-

consin and Attorney Joseph F. Preloznik of Madison,

Wisconsin; and the Defendants, excepting the Defendants

Georgianna W. Ignace and Ada Deer, Carol Dodge, Gor-

don Keshena, and Robert Deer, appeared by their Attor-

ney, Gilbert W. Church, of the Milwaukee law firm of

Foley and Lardner; the Defendants Georgianna W. Ig-

nace, Ada Deer, Carol Dodge, Gordon Keshena, and Rob-

ert Deer did not appear either in person or by counsel

at the trial;

On July 14, 1972, there was further argument before

the Court; at that time Gilbert W. Chureh appeared for

the Defendants other than Georgianna W. Ignace, Ada

ue Cn Ok re

App. 60

Deer, Carol Dodge, Gordon Keshena, and Robert Deer

and N. EB. Isaacson. Vance Waggoner appeared on behalf

of N. E. Isaacson and Ruth 8S. Downs of Wisconsin Indian

Legal Services and Joseph F. Preloznik appeared on

behalf of the Plaintiffs;

On July 24, 1972, the Court issued a written decision

wherein certain issues were determined and jurisdiction

was retained for the later determination of other issues ;

Thereafter, the Defendant, N. . Isaacson & Associ-

ates, Ine. brought two Motions on before the Court seek-

ing supplemental decisions of the Court clarifying points

in the Decision of July 24, 1972;

These two Motions were heard by the Court on July 31,

1972, and on August 10, 1972, respectively, and the Court

having heard oral argument of all Counsel and having

reeeived and. considered Statements of Position and

Briets from Counsel, a second and supplemental Decision

disposing of these Motions was rendered on October 26,

1972;

XOW. THEREFORE, the Court hereby makes and

files the following Findings of Fact and Conclusions of

Law in accordance with its Decisions of July 24, 1972,

and October 26, 1972, and the record herein.

FINDINGS OF FACT

1. The Menominee Indian Tribe was well-established

in. Wisconsin two hundred years before the Kuropean

settlers began their westward movement across the United

States.

2, Except for a small cession of land for the Stock-

bridge-Munsee Reservation, the last of a series of treaties

between the United States and the Menominee Indian

App. 61

Tribe was the ‘Treaty of Wolf River’? of 1854. Under

this Treaty, the Menominee Indians, among other things,

ceded land to the United States, and the United States

agreed to give certain lands to the Menominee of which

the larger part constitutes present-day Menominee

County.

3. Until termination became effective on April 30,

1961, tribal affairs were handled hy the tribe in General

Councils and by the Advisory Council. The General Coun-

cils were meetings open to the entire tribe, at which all

adult enrolled Menominees could vote. The Advisory

Council, created in 1928, was an elected body that con-

cerned itself primarily with business Inanagement of day-

fo-day affairs. Is actions could be overturned by a vote

of a General Council or by the Secretary of the Interior.

4. In 1953, Congress, by concurrent resolution, in-

structed the Seeretary of the Interior to recommend legis-

lation for the withdrawal of Federal supervision over

the Menominees, as well as other named tribes.

Qo In 1954, Congress passed the Termination Act,

PL. 399, 25 ULS.CLAL 892-902. It was later amended on

July 14, 1956, July 2, 1958, and September #, 1960.

6. In November, 1957, a General Council of the Tribe

created the Coordinating and Negotiating Committee,

herein called the ‘*Committee’’, [ts function was to de-

velop a termination plan such as was called for by the

Termination Act. It acted under authority from the Gen-

eral Council which created it and under the Advisory

Council.

7 In December, 1957, the final rolls of membership

in the Menominee Tribe were closed and the membership

list of 8270 persons was published in the Federal Register.

ee os |

Victccpra iia

Dil. f9 Meee He

App. 62

8. A ‘Termination Plan’? was proposed to a General

Council in a series of three meetings in January of 1999,

As amended by those present, the Plan was approved by

a vote of 91 to 16 on January 17, 1959, All of the ex-

pressed sentiment was against sales of land. No one

spoke in favor of any limited or emergency sales,

9, Part of that Plan called for the ereation of a cor-

poration under Wisconsin Law known as Menominee in-

terprises, Ine. and for the creation of a Menominee Com-

mon Stock and Voting Trust, herein called the ‘Voting

Trust.” E found no discussion in any of the minutes as

to whether the trustees would have the right) to CNETELSE

the authority to sell contained in Article NU during the

period that the shares were in trust.

10. Individual members of the Tribe did) not) enter

into written agreements creating the voting trust. What-

ever legal assent exists on the part of the Menominee

Indians to the establishment of the voting trust, ema

nates from the votes of the General Couneil.

11. In completing the corporate arrangements, the

following procedure was followed:

a. The initial Trustees of the Voting Trust were

elected by the General Couneil;

b. The members of the Coordinating and Nego-

iating Committee signed as incorporators of Meno-

minee Enterprises, Ine., herein called ** MET, a cor-

poration organized under the laws of Wisconsin.

e. The Coordinating and Negotiating Committee

subseribed to all the stock of MEI. During this or-

ganizational meeting, the elected directors, whose

names appeared on the Articles and who had been

previously chosen informally, were formally chosen

by the Trustees.

App. 68

d. The Directors of Menominee Enterprises, Ine.,

accepted the subseription of stock previously made

by the members of the Coordinating and Negotiating

Yommnittee,

«The Secretary of the Interior advanced the

sum of $327,000.00 of funds he was holding in trust

as payment for the $27,000 shares of stock;

fl Menominee Knterprises, Ine. issued a single

stock certificate to the Co-ordinating and Negotiating

Committee for 372,000 shares of stock,

g. The Co-ordinating and Negotiating Committee

executed the Voting Trust Agreement, naming as

Trustees of the Voting Trust. those imlividuals pre

viously approved by the General Council,

h. The Co-ordinating and Negotiating Committee

subsequently transferred the stock in Menominee

Enterprises, Ine, whieh the MEI held, to the Meno.

minee Common Stock & Voting Trust.

i. The Trustees, thereupon, issued Voting Trust

Certificates to the enrolled members of the Menommi-

nee Tribe as evidence of the beneficial interest of

such enrolled members in’ the stock held by the

Trustees,

2. The Articles of Incorporation of Menominee En-

terprises, Ine., contain, among other things, the follow-

ing provision:

“ARTICLE VII— VOTING TRUST”

“The shareholders of the corporation may, as pro-

vided by law, create a voting trust for the purpose

of conferring upon trustees the right to vote or other-

wise represent their shares, by entering into a writ-

SOM ONAEY NY SEU Caer PR aS

RAAT LOT PD SIENA ER RB

WARREN Bap ty: eh Nem AF

App. 64

ten voting trust agreement specifying the terms and

conditions of the voting trust, and it is contemplated

that all of the shares initially issued by the corpora:

tion shall be placed in a voting trust.”

12. Wisconsin Statute 80.27, contains the Voting

Trust provisions as follows:

180.27 Voting trust. Any number of shareholders

of a corporation may create a voting trust for the

purpose of conferring upon a trustee or trustees the

right to vote or otherwise represent their shares by

entering into a written voting trust agreement: spe

cifying the terms and conditions of the voting trust

by depositing a counterpart of the agreement with

the corporation at its registered office and by trans

ferring their shares to such trustee or trustees for

the purposes of the agreement... Pid

14. The Articles of Incorporation: of Menominee In

terprises, Inc., contain, among other things, the follow-

ing provision:

ARTICLE NI SALE OF LAND

“Unless otherwise authorized by the affirmative vote

of the holders of not less than two-thirds of the out-

standing shares of stock entitled to vote thereon, the

corporation shall have no authority to sell, exchange,

assign, convey or otherwise transfer all or any por-

tion of the real property owned by the corporation,

. . on

1d. The Agreement creating the Menominee Common

Stock & Voting Trust contains, among other things, the

followng provisions :

“TL. POWERS OF TRUSTEES”

1. The Trustees, in respect of the stock held by

them hereunder, are hereby vested as owners of such

stock (without limitation except as herein otherwise

App. 65

expressly provided) with all of the rights, powers,

and privileges of every kind and character of owners

thereof, including, without limiting the generality

of the foregoing (a) the right to vote the same, as

hereinafter provided, for every purpose, ... .”?

16. By two deeds, both dated April 26, 1961, and re-

corded September 10, L961, in the Office of the Register

of Deeds for Menominee County, Wisconsin, the United

States of American conveyed to Menominee Enterprises,

Ine, all of the real estate which, for practical purposes,

previously constituted the Menominee Indian Reserva-

lion, and presently constitutes Menominee County, Wis-

consin, whieh real estate included. the lands at issue in

this action,

17, On Atyrust 10, 1967, a Joint Meeting was held hy

the Board of Direetors of Menominee Knterprises, Ine.,

and the Trustees of the Menominee) Common Stock &

Voting Trust at Neopit, Wiseonsin. The eight Directors

and seven Trustees tnanimously adopted. the following

Resolution:

“WHEREAS, there is no other means sufficiently

capable of accomplishing the economic improvement

of the Menominee community except by adoption and

implementation of the HRNST & ERNST REPORT;

and

WHEREAS, to provide necessary tax resources

for Menominee County and/or the Town of Menomi-

nee and for the relief of taxation on Menominee En-

terprises, Ine, (and the residents of Menominee

County, Wisconsin), and to assure continued Meno-

mince ownership thereof ;

I, BE IT RESOLVED, that Menominee Enter-

prises, Inc. is authorized to proceed with the reeom-

mendations of the Ernst & Ernst Report as oppor-

tunity and feasibility permit; and

iad el oir ah ae

App. 66

II. RESOLVED FURTHER, that the Corpora-

tion is authorized to define economic development

zones on its land in Menominee County, Wisconsin,

not to exceed 8,750 acres in areas to be defined and

described from time to time by the Menominee Com-

mon Stock & Voting Trust, and/or the shareholders

of the Corporation, whichever then holds the com-

mon stock; and

Ill RESOLVED FURTHER, that pursuant to

Article XII of the Articles of Incorporation of Me-

nominee Enterprises, Inc., within such economic de-

velopment zones warranty deeds may issue as a form

of land transfer, provided a sufficient form of quality

control is 2 condition of such transfer, and provided

always that sufficient areas of land on lakeshore be

reserved for Menominee use.”’

18. On September 23, 1967, a meeting was held in

which all Menominees who held Certificates (except mi-

nors and incompetents whose interests were voted by their

special trustee, First Wisconsin Trust Co.) were invited

to express their opinions on the Resolution of August 10,

1967. Of a total of 109,125 votes cast, 97,738 were for and

11,387 were against the resolution. Among the ‘tyes”’

votes were 79,362 votes cast by First Wisconsin Trust

Co. The referendum was announced as ‘advisory’? and

the written material distributed referred to the use of

warranty deeds.

19. On July 9, 1968, Menominee Enterprises, Ine, a

Wisconsin corporation, and N, KE, Isaacson & Associates,

Inc., also a Wisconsin corporation, entered into an Agree-

ment whereby they established a joint venture to be

known as ‘‘Lakes of the Menominees’’. They planned

to develop and sell to persons, including non-Menominees

certain lands situated in that part of the economic zone

approved for development.

POA RIA MLE A FAI DTT LON A IIR ORIEN nid PE

App. 67

20. By the terms of the Agreement of July 9, 1968,

the Partnership was entered into “for the purpose of

holding, developing and selling the lands referred to’? in

the Agreement, which lands consisted of approximately

0,170 aeres located within the economic development zone

referred to in the Joint Resolution of August 10, 1967.

21. The Agreement of J uly 9, 1968, was approved una-

nimously by the Trustees of the Menominee Common

Stock & Voting Trust.

22. Menominee Enterprises, Inc., conveyed approxi-

mately 5,170 acres of land “for the purpose of holding,

developing and selling the lands referred to”? in the Lakes

of the Menominees Joint Venture Agreement, by means

of seven Warranty Deeds, all seven of which were dated

and recorded in the Office of the Register of Deeds for

Menominee County, Wisconsin, prior to the commence-

ment of this action.

23. The Agreement of July 9, 1968, was performed to

a substantial degree, and in 1969 Isaacson and MEI agreed

fo increase the number of lots to be developed and sold

from 1800 to 2600 all of them to be laid out on the land

mentioned in paragraphs 21 and 22, supra.

24. On or about Mareh 11, 1969, LOM applied for a

permit to construct a third dam in the Legend Lake

project.

25. On October 15, 1971, Isaacson asked MEI if it would

agree to try to sell out the project in 1972 and would ap-

prove incurring additional selling costs beyond the Agree-

iment ceiling of 30 percent. A motion was passed to refer

the matter to the LOM Management Committee to act

within their discretion,

26. At their January 15, 1972, meeting the LOM Land

Managem

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