Petition for Writ of Certiorari — Kalmia Realty & Insurance v. United States

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OCTOBER TERM, 1950

No. 247

KALMIA REALTY & INSURANCE COMPANY,

ET AL.,

Petitioners,

vs.

THE UNITED STAT®S OF AMERICA,

Respondent

PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE

FIFTH CIRCUIT AND BRIEF IN SUPPORT

THEREOF.

Jupce Bren Stevens,

Hattiesburg, Mississippr,

J. R. Buowanayn,

L. Barrett Jongs,

Jackson, Mississippi,

Water S. WELox,

Garner W. GREEN,

Counsel for Petitioners.

We cu, Cooper & WeELcH,

Laurel, Mississippi,

Bucnanan & MontcoMEry,

Laurel, Mississippi,

Green, Green & CHENEY,

801 Standard Life Building,

Jackson, Mississippi,

Of Counsel.

INDEX

Suspsect InpEx

Petition for writ of certiorari.....................

Jurisdictional statement .....................

Summary statement of matters involved.......

Questions whereasto certiorari is herein sought.

Reasons why certiorari should be herein

VER cee NE Ris pean peaprcrtrdanal cl ae paw as convene ee tee

I on i any ee eae yeh

Brief in Suppert Of MOTION... 6. eas,

SII TIA othe oct nicw'e's pane see eae eden

ee Fee SOO 5G ce aaa skereeeitiek)

PE III cans cs bemnu cue Geers

NE i ans oasis We been beac

FO Gere Pe iee Se ee mr nr eee tr

Point I. Rectification of conflict between (a)

State of Washington v. United States, 87

Fed. 2d 421, CCA 9th, and (b) The deci-

sion herein by the Court of Appeals for

the Fifth Circuit requisite in this Court. .

Point II. Oil underlying surface acquired

under the Weeks Act remains subject to

paramount state sovereignty and non-dis-

criminatory ad valorem state tax thereon

validly foreclosed vested title in peti-

tioner, Hendrix, the power of Mississippi

to impose ad valorem taxation supreme. .

Point III. The Weeks Act, if it embraced the

acquisition of severed minerals, was un-

authorized by the federal constitution...

Point IV. Under the original reservation

Kalmia had the unquestioned right to re-

move all oil, being possessed thereof as of

a determinable fee.....................

Point V. Property in oil is admeasured by

state not federal law...................

9449

ii INDEX

Page

Point VI. Under the reservation of the oil,

under a deed prepared by the Govern-

ment, underlying Weeks land, with the

policy of the National Forest Reservation

Commission thereasto, the provision in

the deed requiring ‘‘it be found”’ in order

to effectuate further renewals, by reason

of the United States not being suable and

the other reasons herein set forth, made

the provisions in the deea covenants com-

pensable in damages nex conditions where-

under forfeiture might be............... 76

Point VII. The Court of Appeals in the

Fifth Circuit in holding Kalmia not en-

titled to rely upon representations of Gov-

ernment officials as to the extent of the

provisions to be contained in the deed and

excluding as incompetent evidence ten-

dered, established a rule (a) contrary to

the rule of this Court, Bull v. United

States, 295 U. S. 261, 79 L. Ed. 1421; (b)

contrary to the rule in the Second Circuit

and others, Staten Island Hygeia Ice &

Cold Storage Co. v. United States, 85 Fed.

2d 68; and (c) contrary to the law as an-

nounced by the Supreme Court in the

State of Mississippi............ ...... 76

Point VIII. Provisions in reservation de-

leted by regulation of Donald M. Nel-

son, supra, and by the Petroleum Admin-

istrator, supra, after execution of the al-

ee, Pebeeme LS eee 78

Point IX. The Weeks Act and the public

policy of the National Forest Reservation

Commission thereasto, petitioners repre-

sentatives were actually deceived by those

things to them told and having so been,

thereasto were entitled to relief......... 7y

Point X. The Legislature of Mississippi pro-

hibited from consenting that the United

INDEX lii

Page

States might acquire the oil and, quo ad

the oil, the assumed consent of the Legis-

RES wayne yen eee Die 79

Point XI. Wherever in Mississippi, there

is a statutory power vested in a board of

limited and special jurisdiction, it must

act by its minutes and its minutes must

affirmatively disclose the jurisdiction. A

failure so thus to do invalidates......... 79

SPN ais Or hs Bee ee a eS 79

Appendix A. Opinion of Court of Appeals.......... 83

Conclusions of Law of the District

NE oe rs a cia Pes Spaces 83

B. Weeks Act, Title 16 U.S.C.A., 36 Stat.

Sabie SCE gi AN nT Ca ey fe 5 png 86

C. Mississippi consent statute, Sec. 4156 of

the Mississippi Code of 1942........ 92

D. Excerpt from Hendrix v. Foote, 205

SE a eutes eek ee ee ee 93

EK. Extract from Mississippi Blue Book...

Letter from W. H. Wallace to G. W.

| ERR ee oet Soot oe ee 101

F. Letter to members of the Legislature.. 113

TasLe or Cases CITED

Adams v. Mississippi State Bank, 75 Miss. 701, 23 So.

BU a iaee Oe areas, paige wate ees EEK neg alee ae oes 66

Adams v. Y.é M.V.R.Co., 77 Miss. 194, 24 So. 200. . 66

Alabama & V. R. Co. v. Graham, 171 Miss. 695, 157

BN eras otk Ba bee a OS a eee ies s 68

Alexander v. Bauer, 94 Minn. 146, 102 N. W. 388. 36

Allen v. University System, 304 U. 8. 439, 82 L. Ed.

ME Roe al tetig phere Cheese Sete we bees Sk 40

American Federation of Labor v. Watson, 327 U.S.

eg ds Ss re 5 SE tee esa fe. 67

Anderson v. Sun Oil Co., — Miss. —, 42 So. 2d 238... 32

Ates v. Ates, 189 Miss. 226, 196 So. 243............. 37, 58

Atlas Life Ins. Co. v. W. I. Southern, Inc., 306 U. 8.

ey Wee Ad a OE Be. cA yy ad 20

iv INDEX

Page

Bailey v. Federal Land Bamk, 206 Miss. 354, 40 So. 2d

sia Bas SN ial Bi ie eis bc 54

Bailey v. Federal Land Bank of New Orleams, 207

ee Eee eee cae ree 22

Bank of Oxford v. Adams, 78 Miss. 532, 29 So. 402. . 66

Board of Supervisors of Holmes County v. Black

Creek Drainage Dist., 99 Miss. 739, 55 So. 963... .. 68

Bolivar County v. Coleman, 71 Miss. 832, 15 So. 107. . 72

Bradburn v. McIntosh, 159 Fed. 2d935.............. 61

Brown v. Ohman, — Miss. —, 42 So. 2d 209, 43 So. 2d

BO gus cee aE OS EA aes aR 58, 59, 77

Bull v. United States, 295 U. S. 247, 79 L. Ed. 1421,

14, 61, 76, 80

Butterfield Lwmnber Co. v. Guy, 92 Miss. 361, 46 So. 78 42, 64

Calahan v. Martin, 3 Cal. 2d 110, 43 P. 2d 788, 101

Rit I As th ee ew rice vaewe en aas 28

Calcote v. Texas Pacific Coal & Ou Co., 157 Fed. 2d

BU Gh kee os Sek ee IEA s GEL ER este es 22

Capital Greyhound Line v. Brice, — U. 8S. —, 94 L.

OE 6 on 2a os to Be Soe ee 50

Chapman v. Sheridan Wyoming Coal Co., 338 U. S.

a re i os oo ha es Keene cae dee 37, 63

Collins v. Yosemite Park & Curry Co., 304 U.S. 518,

fe EEE wo ocak hw Sh nas ba Rae y ca a 38, 41

Contmental Oil Co. v. Osage Oil & Refining Co., 69

a ee SS 30

Davidson v. Moore, 37 S. W. 206............. Gay 36

Delno v. Market St. Ry. Co., 124 Fed. 2d 965........ 22

Derry v. Peek, House of Lords, 14 App. Cas. 337.... 58

Edward Hines Yellow Pine Trustees v. Martin, 268

i a lc Be oo eee 23

Everson v. Board of Education, 330 U. S. 1, 91 L. Ed.

RS RRNA es BLOAT PORES PER 41

Ewing v. Mytinger € Casselberry, Inc., — U.S. —, 94

Bi TI EE ae i es OR 63

Family Life Ins. Co. v. Damiel, 79 F. Supp. 62....... 41

Federal Power Com. v. East Ohio Gas Co., — U.S. —,

DU es a i Ch a es CRS 53

Federal Power Com. v. Interstate Natural Gas Co.,

OU: 6.07, CE TAM eR 67

INDEX Vv

Page

Finkbine Lumber Co. v. Saucier, 150 Miss. 446, 116

i WI Aloe unas Cs ss ose ORR AD Melee EER bos 23, 32

First Savings Bank & Trust Co. v. Elgin, 29 N. M.

BE OM. v's kes Pash coe eee ae ae 58

Forest Product & Mfg. Co. v. Buckley, 107 Miss. 897,

Oe ee a a eee Fe eae ek 24

Fox v. Pearl River Lumber Co., 80 Miss. 1, 30 So.

UR ck NC TS are 2 rere Mie ae ea eae he Bee 42

Gooch Milling & Eleva. Co. v. Comm’r of Int. Rev.,

Ss ee eA eae 61

Green v. Board of Supervisors of Adams County, 172

Peek: Be See ee ee ae a 72

Green v. Frazier, 253 U. S. 233, 64 L. Ed. 878........ 41

Gregg v. Birdsall, 53 Barb. 405.................... 36

Griffin v. Dogan & Martin, 48 Miss. 11.............. 54

Griffin v. Miwon, 38 Miss. 424...................... 54

Group No. 1 Oil Corp. v. Bass, 283 U.S. 279, 75 L. Ed.

ME os RR Oe eae OTOL AR a CRORE 42

Gulf Refining Co. v. Stanford, 202 Miss. 602, 30 So.

ee Bre a RO ek 22, 42

Gulf Refining Co. v. Stone, 197 Miss. 713, 21 So. 2d

BF. eC eae ra vee EROS eee eae 28, 49, 66

Gully» “-lmut Gas & Oil Co., 174 Miss. 794, 165 So

Oe: ieceticeder ie treme eter rete oe hh es 69

Gunter v. Jackson, 130 Miss. 686, 94 So. 842......... 71

Haley v. State, 108 Miss. 899, 67 So. 498............ 68

Halsted v. Jessup, 150 Ind. 87, 49 N. EB. 821......... 35

Helvering v. Powers, 293 U.S. 214, 79 L. Ed. 291... .. 40

Hendria v. Foote, 205 Miss. 1, 38 So. 2d 111... .12, 28, 42, 54

Hipp v. Babin, 19 How 278, 15S. Ct. 683............ 20

Hout v. Stratton Mills, 54.N.H.109 ................ 36

Howard v. Lumcolm, 12 Me. 122..................... 36

Illinois, People of State of, v. Campbell, 329 U. S. 362,

OE ae Pe MS Ci'ecoe Pace ce ea oe cage eh 54

Indianapolis v. Chase National Bank, 314 U. 8. 63

A ME 6 rg ek aes ea eae SRE NE 20

Indianapolis Natural Gas Co. v. Spaugh, 17 Ind. App.

Oe, Se i Oe a ES eae 58

Ingram-Day Lbr. Co. v. Clark, 43 Miss. 813......... 51

vi INDEX

International Oil Pipe Line Co. v. Stone, 337 U. S.

8 SR reanin perme emer . 23

International Union of U. A. A. & A. v. O’Brien, —

ee ee ds ME 5) is o's ae DR KS 23

Irons v. Webb, 41 N.J.L. 204....................5. 36, 51

J.M. Griffin Co. v. Jernigan, 170 Miss. 343, 154 So. 342 53

Jackson v. Ashley, 189 Miss. 818, 199 So. 91......... 33, 55

James v. Federal Royalty Co., — Miss. —, 44 So.

ee ce eg UN te ce gos, 77

Jefferson v. Walker, 199 Miss. 705, 26 So. 2d 239.... 58

Johnson v. Truitt, 122 Ga. 327, 50 8. E.136......... 36

Jones v. Mount, 30 Ind. App. 59, 63 N. EH. 798........ 58

Jones v. Portland, 245 U. S. 217, 62 L. Ed. 252...... 41

Kennington v. Palmer, 255 U.S. 100, 65 L. Ed. 528. . . 71

Kentucky Whip & Collar Co. v. I.C.R. Co., 299 U.S.

Re soos ia ehh es ois a8 08 oe 50

Kidd v. Pearson, 128 U.S. 120, 32 L. Ed. 346........ 41

King County v. Seattle School Dist. No. 1, 263 U.S.

Se Sh, by os oben ad bUbh eaves s 67

King v. City of Louisville, — Miss. — , 42 So. 2d 813. . 68

Knotts v. Hydrick, 12 R. Law 314.................. 36

Knox, State ex rel., v. Grenada County, 141 Miss. 701,

I a in i a cy Sk aya 68

Koenig v. Calcote, 199 Miss. 435, 25 So. 2d 763....... 22, 32

Leisy v. Hardin, 135 U.S. 100, 34 L. Ed. 128........ 50

Lloyds Estate v. Mullen Tractor & Equip. Co., 192

DR: Ms A IE Ps hia a BS 5 ek two vw ss 32

Louisville & Nashville R. Co. v. F. W. Cook Brewing

Ge., 925 U.S. 70, SG is, a. B55... ss ee 50

Mathews v. Mulvey, 38 Minn. 342.................. 36

Mauer v. Hamilton, 309 U. S. 598, 84 L. Ed. 969, 135

Ma I es a i wn gee ae EK baste ve 63

M’Culloch v. Maryland, 4 Wheat. 316, 4 L. Ed. 579. . 52

McAllister v. Honea, 71 Miss. 256, 14 So. 264....... 58

McIntosh v. Vail, 126 W. Va. 395, 28 S. E. 2d 607, 151

POM Rn 5G hae os nek Fad RE 28

McNeese v. Renner, 197 Miss. 203, 21 So. 2d7....... 35

Memphis & Charleston R. R. Co. v. Neighbors, 51

PP WEN a Wa Oy eee ey encase eae BE CA wes 36

INDEX vii

Memphis Natural Gas Co. v. Stone, 335 U. S. 80, 92

Ee MO ihe cyan Peeek ad eh ayn e pene seal eee 23

Merrill Eng. Co. v. Capital Nat. Bank, 192 Miss. 378,

i ee ss oie ee 27, 33, 48, 55

Monaghan v. Mount, 36 Ind. App. 188, 73 N. E. 579. . 58

Mulane v. Central Hanover Bank & Trust Co.,— U.S.

ining Bd, Ss MR 6 oh aT EE LOOT 27, 36, 63

Murphey v. Seward, 145 Miss. 713, 110 So. 790...... 55

Nash Mississippi Valley Motor Co. v. Childress, 156

PUG: TN A Ue WS on 2d § Seay on Pra dketee alas 77

Natchez v. Thornton, 88 Miss. 1, 41 So. 498.......... 37

National Labor Relations Board v. Mexia Textile

Mills, Inc., — U.S. —, 94 L. Ed. 757... 2.20.22... 52

New Brunswick v. United States, 276 U.S. 547, 72 L.

Ws I i her esac Cho nuke neta aee as 2, 25, 55

New York v. United States, 326 U. S. 572, 90 L. Ed.

Be a eae b ROE OS eA Ree 40

New York, People of, v. Maclay, 288 U. S. 290, 77 L.

PG ie oe ek Oa et ae ene Sy 54

Nicholson v. Board of Mississippi Levee Com., 203

Bene, Tas BO I aes PCa EA ae es 64, 70

Norris v. Fleming, 62 Idaho 381, 112 P. 2d 482....... 58

Nunnery v. Ford, 92 Miss. 263, 45 So. 722........... 58

Ohio v. Helvering, 292 U. S. 360, 78 L. Ed. 1307..... 40

Ohio Ou Co. v. Indiana, 177 U. S. 190, 44 L. Ed. 729. . 49

Oklahoma Tax Com. v. Texas Co., 336 U.S. 342, 93 L.

MN WUE ii sea eh ey ev Oe ee cata 12, 26, 49

Pace v. State, 191 Miss. 780, 4 So. 2d 270........... 35

Panama Refining Co. v. Ryan, 293 U. S. 388, 79 L.

RS SN eS Fac eee we RO ee Aen ES 65

Parsons & Sweeney Ou Co. v. McCormic, 68 W. Va.

as Fe ee ass ee ee eee aE 58

Paterson v. Graham, 164 Pa. St. 241............... 36

Penns ¥; been, © Ma: BF. ok RS 36

Penn Mutual Life Ins. Co. v. Numnery 176 Miss. 197

SE A Gio BR ER a: 76, 77

Perry v. United States, 294 U. 8. 330, 79 L. Ed. 912. 36

Peterson v. Gibbs, 147 Cal. 1, 81 Pac. 121........... 35

Portwood v. Montgomery County, 52 Miss. 523...... 70

Vili INDEX

Prall v. Burckhartt, 299 Ill. 19, 132 N. E. 280........

Propper v. Clark, 337 U.S. 472, 93 L. Ed. 1480......

Quitman County v. Self, 156 Miss. 273, 125 So. 828. .

Rahrer, Re, 140 U. S. 545, 35 L. Ed. 572............

Ramage v. Wilson, 37 Ind. App. 532, 77 N. E. 368,

Os ae NA hain GAT ees be

Reed v. Charping, — Miss. —, 41 So. 2d 12.........

Richardson v. Holman, — Fla. —, 30 So. 2d 641. ..

Rist v. Toole County, —Mont. —, 159 P. 2d 340, 162

Rie MEE a ek okt Coy ee ARG LL

Salter v. Bolivar County, 111 Miss. 867, 72 So. 700...

Seal v. Donnelly, 60 Miss. 658.....................

Seward v. Dogan, 198 Miss. 419, 21 So. 2d 292......

Shooters Island Shipyard Co. v. Standard Shipbuild-

I, Sl Bs FO wigs hoe eee oe eee

Simpson County v. Floyd, 192 Miss. 501, 6 So. 2d 580

Skelly Oil Co. v. Phillips Petroleum Co., — U. S. —,

De a MN I or ee eer ove ha ec kee oa a ee

Snell v. Ins. Co., 98 U.S. 85, 25 L. Ed. 52............

South Carolina v. United States, 199 U. S. 487, 50 L.

NN nos esd CaN wie cH A ha hewn

Spector Motor Service v. McLaughlin, 323 U. S. 101,

Wr RI oe Necre Oa BRAS ea a

Spokane County v. United States, 279 U. S. 80, 73

PE ig Soe a Sia ee Se

S. R. A. v. Mimmesota, 327 U.S. 558, 90 L. Ed. 851... .

Stainback v. Mo Hock Ke Lok Po, 336 U. 8S. 368, 93

State v. ( Cummings, 206 Miss. —, 40 So. 2d 587......

State v. Woodruff, — Ala. —, 46 ey WR ONe ee ini es

Staten Island Hygeia Ice & Cold Storage Co. v.

United States, 85 Fed. 2d 68............... 15, 60,

Stern v. Parker, 200 Miss., 27, 27 So. 2d 402........

Stokely v. State, 149 Miss. 435, 115 So. 563..........

Stuckley v. Butler, Hob. 300.......................

Sumter Lumber Co. v. Skipper, 183 Miss. 595, 184

26, 49

76, 80

INDEX ix

Page

Susquehanna Power Co. v. State Tax Commission,

Soe Ue ON, Fe dk NS en eee 41

Sweatt v. Painter, — U.S. —, 94 L. Ed. 783........ 63

Texas, State of, v. State of Florida, 306 U. S. 398, 83

Bh a REE sr oie See on OES a 20

Toothman v. Courtney, 62 W. Va. 177, 58S. EB. 915... 28

United States v. Allegheny County, 322 U. 8. 174, 88

a ik csi Gekekee cucebawes oe eas 26, 33

United States v. Beebee, 17 Fed. 36................ 61

United States v. Burnison, 339 U. S. 87, 94 L. Ed. 433 32, 41

United States v. California, 332 U. S. 19, 91 L. Ed.

BR Re eae etry FYB RT ne alee gO 52

United States v. Fox, 94 U.S. 315, 24 L. Ed. 192..... 33, 41

United States v. Gerlach Live Stock Co., — U. 8. —,

DE i Oe WC rock er et en 50, 80

United States v. Kansas City Life Ins. Co., — U. 8.

nt The A ES oc ats 6s eee ee Rn 34

United States v. Louisiana, — U. S. —, 94 L. Ed. 800 52

United States v. Nebo Ou Co., 90 F. Supp. 73,

9, 13, 27, 28, 34, 40, 48, 60

United States v. State National Bank of Boston, 96

ie Sie Se a A oon ewes eaten Shoes 61, 80

United States v. State of Texas, 314 U. S. 480, 86

Ba. Se IE 6 oak ee bs ak ee. NOES 54

United States v. Texas, — U.S. —, 94 L. Ed. 805.... 46, 52

United States v. Waddill, Holland & Flinn, 323 U. S.

ee ee as i Ses a LS oats a ot oe 54

Vicksburg Bank v. Worrell, 67 Miss. 47, 7 So. 219. ... 66

Washington, State of, v. United States, 87 Fed. 2d 421,

12, 20, 80

Watson v. Massachusetts Mut. Life Ins. Co., 140

i aE A nec ie a than Ge mato, 77

West v. Oklahoma Tax Comm., 334 U. S. 723, 92

Ri els oe cs SL ae aa en a ae 26, 27, 52

White v. Union Producing Co., 140 Fed. 2d 176...... 77

Whitworth v. Mississippi State Highway Com., 203

ee OG EES ss occ ipo eek 64, 70

Willmette Park District v. Campbell, 338 U. S. 411,

Sis EE 6255 ee RRS OR ee in 40

Wilson v. Cook, 327 U. S. 474, 90 L. Ed. 793,

12, 38, 43, 48, 80

x INDE«

Page

Wisconsin Elec. Power Co. v. United States, 336 U. 8.

we Pe OS Re aT eet pee ee 36

Wisconsin Lumber Co. v. State, 97 Miss. 571, 54

Re I i RA a 24

Statutes Crrep

Constitution of the United States:

Art. 1, Sec. 8, subsection 17................... 38

Mississippi Constitution, Section 112............

i Oe ae i ee ee ee

United States Code, Title 28, section 1254, 62 Stat.

928- section 1331, 62 Stat. 930; section 1332, 62

Stutute 930; section 1345, 62 Stat. 933; section

Seu es Mc cata VG yan oie tcwks tks 1

pe oe a ee yee ene ree 51

16 U.S. C. A. 486, c. 105, sec. 2 as amended Feb. 28,

Fs. Os ey GP is ss ie 0S base Eka 49, 51

16 U.S. C. A. 500, 36 Stat. 963, as amended 58 Stat.

BO eee ee a EST LLCS Cab CER Li wced 67

16 U.S. C .A. 501, as amended 58 Stat. 737.......... 68

16 U.S. C. A. 516, 36 Stat. 962, amended 43 Stat. 1215 10

16 U. 8. C. A. 518, c. 186, sec. 9, 36 Stat. 962, as

amended c. 145, 37 Stat. 855..................... 42

Weeks Act (March 1, 1911, Ch. 186, 36 Stat. 961-963,

as amended, 37 Stat. 855, 38 Stat. 441, 43 Stat. 654,

43 Stat. 1215, and 49 Stat. 1225, Title 16, U. S.

C. A., Sees. 480, 500, 513-519, 521, 552 and 563.... 25

BG. RMR OE TS bo env a Na RHO 23, 34

36 Am. Jur. Sec. 23, 35, pp. 297, 306................ 49

Broom’s Legal Maxims, pp. 27, 28.................

Eg PE oa ie HFA 4 hee a has wae OES

BE hs Wei Sov WO Siig WO A ics oss a boy SR ees

INDEX xi

Page

OT; tes Be ai ie ess A US) 78

BGS) Fy te OO, Bs i ek eee ieee GR 49

Minor’s Law of Tax Titles, page 2................ 53

Minor on Real Property, Vol. 1, sec. 780, p. 1012.... 23

1 Summers Oil and Gas, 2d Ed., Sees. 11, 61, and 62 49

2 Summers Oil and Gas, Ch. 10, Sec. 301, p. 159...... 30, 74

4 Thompson on Real Property, sec. 2044, p.571...... 37

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1950

No. 247

KALMIA REALTY & INSURANCE COMPANY,

ET AL.,

Petitioners,

vs.

THE UNITED STATES OF AMERICA,

Respondent

PETITION FOR WRIT OF CERTIORARI

To the Honorable Chief Justice and Assoctate Justices of

the Supreme Court of the United States:

Jurisdictional Statement

The jurisdiction of this Honorable Court is invoked

under New Title 28, United States Code, Judiciary and

Judicial Procedure, Section 1254, 62 Stat. 928; Section

1331, 62 Stat. 930; Section 1332, 62 Stat. 930; Section 1345, -

62 Stat. 933; Section 2101, 63 Stat. 104; together with Rule

38, 5(b) of this Court.

Summary Statement of Matters Involved

Petitioners are defendants in United States v. Kalmia

Realty & Insurance Company, et al., wherein the District

Court granted the relief of complete cancellation and con-

firmation, May 11, 1949, Tr. 391, 407, 419, 421, and the

Court of Appeals for the Fifth Circuit affirmed in Cause

No. 12,965, May 15, 1950, Tr. 445. Opinion, with Conclu-

sions of Law, thereby affirmed, in the District Court, Appen-

dix ‘‘A’’, 181 Fed. 2d 598.

The Parties:

1. United States of America, sole complainant and ap-

pellee in the Court of Appeals and respondent here.

2. Defendants, appellants and petitioners are:

(a) Kalmia Realty & Insurance Company, et al. (here-

inafter called ‘‘Kalmia’’), the common source of the con-

ventional title and reservor of the minerals; and

(b) Tom Hendrix, holder of an independent state tax

title, assumed to be invalidated solely in virtue of New

Brunswick v. United States, 276 U. S. 547, 72 L. ed. 693.

The Facts:

1. Kalmia initially owned, prior to the depression, some

20,000 acres of land in Jones and Wayne Counties, Missis-

sippi, wherefor the price had been $3.00 per acre. The

depression having come, Kalmia sold to the United States

under unitoru: deeds, wherein pertinent provisions are, Tr.

18, 26:

‘‘This Deed made this the 29th day of December,

1933, by and between Kalmia Realty and Insurance

Company, a corporation, * * * party of the first

part, and the United States of America, * * * party

of the second part.

‘‘Witnesseth, that for and in consideration of the

sum of One Dollar and Thirty-five Cents ($1.35) per

-—

acre, cash in hand paid * * * the said party of the

first part doth * * * sell and convey unto the said

United States * * * the following described real

estate and its appurtenances, lying and being in the

County of Wayne, and the State of Mississippi;

* * * * * * *

‘*Said lands herein described containing in the aggre-

gate 19,587.54 acres, * *

‘Reserving, however, to the Kalmia Realty and In-

surance Company, its successors and assigns, for a

period of Ten (10) years from December 24, 1933, with

extension as hereinafter provided, all oil, gas and other

valuable minerals deposited in, on or under said tracts

of land, with full right to it, its lessees, successors and

assigns at any and all times during said period to

enter upon said lands and to mine, to bore for and to

remove oil, gas and other minerals of every description

found therein or thereon.

‘‘Provided; That if at the termination of the said

ten year period of reservation it is found that such

oil, gas, and other valuable minerals, mineral rights,

and interests are being operated at any time during

the preceding five years, to commercial advantage, then

and in that event, the said right to mine and remove

said oil, gas, and other valuable minerals, shall extend

for a further period of five years, and further: That

the right to mine and remove oil, gas, and other val-

uable minerals shall extend in periods of five (5) years

whenever operation during the preceding five years

has been for an average of 120 days per year through-

out the period.

‘*Provided; Further, that the right or rights to

mine and reserve oil, gas and other valuable minerals -

when extended shall be limited to an area of twenty-

five acres of land around each well or mine producing,

and each well or mine being drilled or developed at

time of first extension, to-wit: December 24, 1943.

‘*Provided: That at the termination of the ten year

period, if not extended, or at the termination of any

extended period, in case the operation has been car-

ried on for the number of days and under conditions

stated, the right to mine and remove oil, gas, and other

valuable minerals shall terminate and a complete fee

in the land become vested in the United States, and

further,

‘‘Provided: That the boring of wells and the mining

and removal of oil, gas and other valuable minerals

reserved to the vendor, its successors and assigns,

shall be done strictly in accordance with the rules and

regulations prescribed by the Secretary of Agriculture,

which are as follows:

‘*1. Every person claiming the right to prospect

for minerals, oil or gas or the products thereof, or to

mine, drill, develop or operate in or upon lands ac-

quired by the United States under the provisions of

the Act of March 1, 1911 (36 Stat. 961), with a reserva-

tion to the grantor of mineral rights, including oil

and gas, must, on demand, exhibit to the Forest Off-

cer in charge, satisfactory written evidence of right

or authority from, through, or under the said grantor.

‘*2. In prospecting for, and in mining and remov-

ing minerals, oils, and gas, and in manufacturing

the products thereof, only so much of the surface shall

be occupied, used or disturbed as is necessary for the

purpose.

‘*3. In underground operations all reasonable a.

usual precautions shall be made for the support of the

surface, and to that end tunnels, shafts, or other work-

ings shall be subject to inspection and examination by

the Forest Officers, Mining Experts, or Inspectors of

the United States.

‘*4. Payment at the usual rates charged in the lo-

cality for sales of National Forest timber, and timber

products of the same kind or species, shall be made

to the United States for all timber, undergrowth or

young growth, cut, destroyed, or damaged in pros-

pecting, mining, drilling, or removing minerals, oil or

gas, or in manufacturing products therefrom, and in

the location and construction of buildings or works of

—

any kind for use in connection therewith. All slash

resulting from such cutting or destruction shall be

disposed of as directed by the Forest Officer when

inflammable in his judgment. No timber, undergrowth,

or reproduction shall be unnecessarily cut, destroyed,

or damaged.

**5. All buildings, camps, equipment, and other

structures shall be removed from the Forest within six

months after the completion or abandonment of the

operation, otherwise such buildings, camps, equipment,

and other structures shall become the property of the

United States.

‘**6. All destructible refuse caused by the operations

hereunder, which interferes with the administration

of the Forest or endangers forest growth, shall within

six months after the completion of said operation be

disposed of.

‘*7, While operations are in progress, the operators,

contractors, subcontractors, employees of contractors

and subcontractors at work on the National Forest shall

use due diligence in the prevention and suppression

of all fires, and shall be available for service in the

extinguishment and suppression of all fires within the

particular locality.

‘‘The Said Kalmia Realty and Insurance Company

for itself, its successors and assigns, doth covenant to

and with the said United States of America, its suc-

cessors and assigns (1) that it is seized and possessed

of a good and valid fee simple title to the above de-

scribed lands, (2) that it has the right to convey the

same, (3) that the said United States of America shall .

have quiet and peaceful enjoyment of the same, (4) that

the same is free and unincumbered except as herein-

above shown, (5) that it will execute such other and

further assurances of title as may be necessary, and

(6) that it will forever warrant and defend the title

thereto against the lawful claims of all persons whom-

soever.’’

Compare Findings of Fact and Conclusions of Law, Tr. 391:

‘9. This case was filed June 12, 1946 by the Govern-

ment of the United States against Kalmia Realty and

Insurance Company, a corporation, and another, and in

the complaint prayed that a decree be entered quieting

the title in the United States to the land that is in-

volved in this controversy, and to declare that the

United States is the owner in fee simple and adjudging

that the defendants have no right, title or interest

therein, and to enjoin them permanently from assert-

ing any claim or title thereto.’’

(This is inaccurate. Minerals alone, oil, were involved.)

‘<3. The controversy hinges to a large extent on the

deed that was executed on December 29, 1933, by Kal-

mia Realty & Insurance Company, by which it con-

veyed to the Government of the United States large

quantities of land located in Wayne and Jones Coun-

ties, Mississippi, * * *.

‘*5. The defense of the complaint, in the main, is

based upon two grounds; (1) That fraud was perpe-

trated upon the representative of the grantor at the time

and by the execution of the deed in question, such fraud

alleged to have been perpetrated by the representative

of the Secretary of Agriculture with authority to make

such representations; and (2) that the operations upon

said lands as provided for in the deed, were carried

on within the 5-year period before the expiration of

the ten years, to a commercial advantage and, there-

fore, that the grantor, Kalmia Realty & Insurance

Company, was entitled to continue the operations as

therein provided.

‘*8. The Court finds as a fact that Kalmia Realty &

Insurance Company retained for a period of ten years

all the gas, oil and valuable minerals deposited in, upon

or under said tracts of land, with full right in itself,

its lessees or assigns at any and all times during said

period to enter upon said lands and to mine, bore for

and remove the oil, gas and other minerals of every

description found therein or thereunder; * * *.’’

(and other provisions as set forth above in the deed

form).

**9, The Court finds that during the 10-year period

and at the end of the 10-year period there was found

no oil, gas or other valuable mineral or mineral rights

had been operated within the past five years or that

was in operation at the termination of the 5-year period.

**10. The Court finds that Kalmia Realty & Insur-

ance Company did sell leases on said property and

receive an amount of about $15,000 or $16,000 from

said leases during the 5-year period preceding such

termination, and its lessees entered upon said land

and took cores and drilled holes to a depth of from

200 to 1,000 feet in various spots, and also there was

drilled a well to a depth of over 2,000 feet, but no oil

was found therein in commercial quantities. Geologi-

cal tests showed that some of the grains of sand had

oil on them, but it was never developed to commercial

advantage and was abandoned as a dry well.’’

2. By uncontradicted testimony, that done during the

last five year period may be thus epitomized, Testimony of

Urban B. Hughes, Tr. 417:

‘As the result of work carried on by the writer

(Hughes), much valuable information was uncovered

which added greatly to the prospects of finding oil in

the area. In summary these were:

**1. A core drill survey which showed a favorable

structure.

‘*2. A magnetic survey which indicated a geophysical

prospect.

‘*3. The drilling of the Hill and Hill well which

furnished an oil show.

‘“4. An indirect contact by Sinclair-Wyoming which

Company did core drilling and seismic work, both show-

ing structure.

‘<5. Sub-surface mapping of the area which also

shows the area to be favorable.’’

On December 24, 1943, the Government ousted Kalmia and

its lessees whose leases had not expired, and it forthwith

made disposition to the major oil companies especially of

the tract thus explored, and therefrom the United States,

doing precisely that which Kalmia had done, received an

estimated three quarters of a million dollars bonus for

mineral leases plus the stipulated royalty. The District

Judge held, as to that thus done, Tr. 397:

‘*2. The Court concluded as a matter of law that

the language contained in the reservation of the oil

rights and under the conditions therein provided means

that there must have been oil or minerals mined and

produced within five years prior to the termination

of the 10-year period or at the time of the termina-

tion and that the leasing of the lands for exploration

by the lessees was not a compliance with the provisions

of the deed; and that, construing the deed in its en-

tirety, giving effect to the language used, and in its

ordinary and accepted terms, it was the intention of

the parties to these documents that there must be a

production of oils or minerals, or a well being drilled

at the time in order to secure the benefits of the ex-

tended provisions.”’

Which, with deference, is fundamentally fallacious. Fur-

thermore, the District Judge specificaily excluded com-

petent evidence tendered through witnesses to show mis-

representations by the government’s representatives and

substantially held

(a) That such fraud could not be made available as

against the Government; and

(b) ‘*9. The Court concludes as a matter of law that,

even if proved, the misrepresentation which the Gov-

ernment’s agent, Mr. Conarro, is charged with making,

would not serve as a basis for voiding any part of the

deeds to the United States because it dealt with a

matter of law with which Kalmia was charged with

notice and Mr. Conarro was not authorized to make

any representations as to matters of law.’’ Tr. 423.

Compare United States v. Nebo Oil Co., 90 F. Supp. 73, 90:

‘‘The general policy followed by the (National For-

est Reservation) Commission was established at a meet-

ing held on February 24, 1931. The pertinent portions

of the minutes of that meeting read as follows:

‘« ‘Secretary Wilbur stated that as he understood

the general attitude taken by the Solicitor, and from

the practicable standpoint, the acquisition of these out-

standing mineral reservations is not a necessary fea-

ture of the acquisition of forest lands.

‘* “Mr. Marshall said the Forest Service felt that the

expense of setting up the machinery to condemn min-

eral rights would probably exceed any practicable

benefits of that policy. He said that the Forest Service

has had very little interference due to reservations.

‘«*Secretary Wilbur asked if the Forest Service

thought it would be impracticable to pursue such a

policy.

‘«*Mr. Kneipp stated that the original Weeks Law

authorized and contemplated purchases subject to min-

eral reservations and the amendment of March 4, 1913,

authorized purchases subject to mineral rights out-

standing in third parties. The existing policy of pur-

chasing lands subject to mineral reservations therefore

is in full accord with legislative policy. Every effort

is made to secure title free from reservations but that

cannot always be done. Up to date the exercise of

such rights has not unduly interfered with the use of

the acquired lands for forest purposes and such inter-

ference as might occur is generally more than offset

by cooperative benefits and savings in purchase price.

ee PD AMER) CML ELENA ONE NS BOF

Unless lands are acceptable subject to mineral rights

it would be very difficult to consolidate the Government

holdings.

‘* “Senator Keyes askea what the question before the

Commission was and Secretary Hurley said he raised

the question as to the policy of acquiring forest lands

without the complete title in fee and the solicitor has

now made a report in which he shows that the policy

of buying lands with mineral reservations outstanding,

has the sanction of law and has been heretofore con-

sidered the best policy. The question is now whether

we are going to adopt the suggestion of the solicitor.

‘¢¢Senator Harris expressed the opinion that the

Commission should have the power to act on individual

cases. In nine-tenths of the cases the land could be

acquired without the mineral rights reserved. Where

the mineral rights amount to a great deal, he did not

think it is intended by law that the Commission should

put the Government into the timber or mineral busi-

ness, which would be using funds which should be put

into the purchase of lands.

‘**A motion to continue the prevailing policy of

buying lands subject to mineral reservations was

moved by Secretary Wilbur, seconded by Senator

Keyes and carried.’

‘‘The question of acquiring lands subject to out-

standing mineral reservations was again considered

by the Commission at the meeting held on March 3,

1938, and the conclusions reached in 1931 were again

restated.’’

Under Mississippi practice judicial notice of these records

will be taken.

3. These lands were acquired under the Weeks Act, as

amended, whose pertinent provisions hereasto are as shown

in Appendix ‘‘B’’, but note especially, 36 Stat. 962,

amended 43 Stat. 1215, Title 16 U.S.C.A., Sec. 516:

‘‘The Secretary of Agriculture is authorized to pur-

chase, in the name of the United States, such lands as

have been approved for purchase by the National

Forest Reservation Commission at the price or prices

fixed by said commission. No deed or other instru-

ment of conveyance shall be accepted or approved by

the Secretary of Agriculture under this section until

the Legislature of the State in which the land lies

shall have consented to the acquisition of such land

by the United States for the purpose of preserving the

navigability of navigable streams. * * *.’’

4. Mississippi’s consent statute, Section 4156, Missis-

sippi Code of 1942, appears as Appendix ‘‘C’’,

5. The Legislature of Mississippi, being subject to the

provisions of the Constitution of Mississippi, herein set

forth in Pornt II, subdivision VI, was wholly without

power to surrender, if it so did, Mississippi’s sovereign

power of taxation, quo ad minerals so located as

(a) In no way to interfere with navigation; and

(b) In no way to interfere with reforestation; it being

said in the Nebo case, supra, at page 99:

‘‘The Commission and the Department of Agricul-

ture have repeatedly recognized that the ownership of

the mineral rights by third persons will not interfere

with the purposes for which the land was being

acquired and have stated that the ownership of oil

and gas rights by third persons are a positive benefit

because they provide excellent fire control. * * *.’’

6. Assertion of the state sovereignty of taxation in rem

against the minerals. These minerals were sold Septem-

ber 21, 1942, and thereasto the court held, Tr. 408:

‘¢* * * Had the surface and minerals been owned

by private individuals under the same conveyance that

is here in controversy, then, of course, the tax title as

between private parties would have been good for the

reason that under the law of Mississippi under a

ee eee ee

recent decision of the Supreme Court of Mississippi’’

(Hendria v. Foote, 205 Miss. 1, 38 So. 2d 111, See Ap-

pendix ‘‘D’’) ‘‘it was definitely held that the sale of

minerals which had been assessed for taxes was valid

and the validity of the assessment rolls of the county

for the year wherein the taxes were assessed has been

held valid as between private individuals, but under

the law of the United States the interest of the United

States in lands is not subject to taxation, as was held

in the New Brunswick case, 276 U.S, * * *.”’

And, assuming to follow this decision, the District Court

cancelled petitioners’ title to the minerals. Thus sharply

bringing to this Court for decision the defining of the

boundary between the state’s power of taxation, quo ad

non-essential minerals, under the Weeks Act.

7. Petitioners contend that non-essential minerals under-

lying land acquired by the United States under the Weeks

Act, especially the oil, remains subject to the paramount

state sovereignty of taxation, and that this Court has im-

pliedly, if not expressly, so determined. Compare Wilson

v. Cook, 327 U.S. 474, 90 L. ed. 793; Oklahoma Tax. Com.

v. Texas Company, 336 U.S. 342, 93 L. ed. 721.

8. The Court of Appeals and the District Court wrong-

fully failed to apply to the tax title the law as established

impliedly, if not expressly, in this Court.

Questions Whereasto Certiorari Is Herein Sought

These questions are of such importance as demand cer-

tiorari, involving substantially (a) the Government;

(b) oil; (c) State consent; and (d) State territorial taxing

Power.

I. Rectification of conflict between (a) State of Wash-

ington v. United States, CCA 9th, 87 Fed. 2d 421, and

(b) the decision herein by the Court of Appeals for the

Fifth Cireuit requisite in this Court.

II. Oil underlying surface acquired under the Weeks

Act remains subject to paramount state sovereignty and

non-discriminatory ad valorem state tax thereon validly

foreclosed vested title in petitioner, Hendrix, the power

of Mississippi to impose ad valorem taxation supreme.

(a) Uniform coordination in this Court requisite under

administrative policy of the National Forest Reservation

Commission which, with deference, contravenes expressly

the decisions below that leasing in standard form with

actual prospecting done constitutes a commercial ad-

vantage. Compare United States v. Nebo Oil Co., 90 F.

Supp. 73; but if therein as to the estate we err, then

(b) The maximum property vested in the government

being a possibility of reverter with no vested estate in the

minerals state sovereignty sufficient to divest such pos-

sibility. Under the original reservation Kalmia had the

unquestioned right to remove all oil, being possessed

thereof as of a determinable fee, the tax sale thereof valid.

See Point I, subdivision II.

States had obtained a vested estate in the oil under the

Weeks Act, still such an estate as to oil was held not in a

Governmental capacity but in a private capacity and being

so held was subject to divestiture through foreclosure of

paramount state ad valorem tax lien. See Point I, sub-

division ITI.

(d) Under the Weeks Act the United States has con-

sented, if this be essential, to ad valorem taxation of oil

reservations. See Point II, subdivision IV.

(e) Mississippi’s sale of minerals, including oil, to pay

for defaulted ad valorem non-discriminatory tax, valid.

See Point II, subdivision V.

(f) The legislature of Mississippi prohibited from con-

senting that the United States might acquire the oil and,

quo ad the oil, the assumed consent of the Legislature a

nullity. See Point II, subdivision VI.

(g) Wherever in Mississippi, there is a statutory power

vested in a board of limited and special jurisdiction, it -

must act by its minutes and its minutes must affirmatively

disclose the jurisdiction. A failure so thus to do invali-

dates. See Point I], subdivision VII.

Ill. The Weeks Act, if it embraced the acquisition of

severed minerals, was unauthorized by the Federal Con-

stitution. See Point III.

IV. Property in oil is admeasured by state, not federal,

law. See Point V.

V. Under the reservation of the oil, under a deed pre-

pared by the government, underlying Weeks land, with the

policy of the National Forest Reservation Commission

thereasto, the provision in the deed requiring ‘‘it be found’’

in order to effectuate further renewals, by reason of the

United States not being suable and the other reasons

hereinabove set forth, made the provisions in the deed

covenants compensable in damages not conditions where-

under forfeiture might be. See Point VI.

VI. The Court of Appeals in the Fifth Circuit in holding

Kalmia not entitled to rely upon representations of govern-

ment officials as to the extent of the provisions to be con-

tained in the deed and excluding as incompetent evidence

tendered, established a rule (a) contrary to the rule in this

Court, Bull v. United States, 295 U.S. 261, 79 L. ed. 1421;

(b) contrary to the rule in the Second Circuit and others,

Staten Island Hygeia Ice & Cold Storage Co. v. United

States, 85 Fed. 2d 68; and (c) contrary to the law as

announced by the Supreme Court in the State of Missis-

sippi. See Point VII.

VII. Provisions in reservation deleted by regulation of

Donald M. Nelson and by the petroleum administrator after

execution of the alleged reservation. See Point VIII.

VIII. The Weeks act and the public policy of the Na-

tional Forest Reservation Commission thereasto, peti-

tioners’ representatives were actually deceived by those

things to them told and having so been, thereasto were

entitled to relief. See Point IX.

IX. The Legislature of Mississippi prohibited from con-

senting that the United States might acquire the oil and,

quo ad the oil, the assumed consent of the Legislature a

nullity. See Point X.

X. Wherever in Mississippi, there is a statutory power

vested in a board of limited and special jurisdiction, it must

act by its minutes and its minutes must affirmatively dis-

close the jurisdiction. A failure so thus to do invalidates.

See Point XI.

Reasons Why Certiorari Should Be Herein Granted

As immediately heretofore shown:

(a) The Court of Appeals in this cause decided an im-

portant question of Federal procedure directly in con-

flict with the rule as established in the Ninth Circuit and

elsewhere applied and a reconciliation hereasto is essential.

(b) The Court of Appeals herein decided a very im-

portant Federal question as hereinabove shown in conflict

with (1) the opinions of this Court; (2) the opinions on

the precise point in other Circuits; and (3) in conflict with

the established law in the State of Mississippi.

oil under mineral reservations where surface has been

acquired by the Government is, as above shown, a vital

issue solely solvable herein and of the utmost national im-

portance for appropriate preservation of the dual system

of government.

(d) The Court of Appeals of the Fifth Circuit in affirm-

ing the District Judge held petitioners not entitled to

asserted fraud as against the Government, with deference,

in palpable conflict with (1) the decisions here; (2) de-

cisions in other Circuits; and (3) decisions in the State

Supreme Court.

(e) And for other causes apparent to this Court and not

more specifically assigned than is hereinabove done.

Petitioners attach to this petition a certified copy of the

transcript of the record of the United States Court of

Appeals, and upon presentation of the petition have

furnished ten copies of the record as printed in the United

States Court of Appeals, Fifth Circuit, with proceedings

and opinions in that court.

Wherefore, petitioners pray for a writ of certiorari from

this Honorable Court directed to the United States Court

of Appeals for the Fifth Circuit, commanding that court

to certify and send to this court for its review and determi-

nation, on a day named therein, a full and complete tran-

script of the record and all of the proceedings in the case

of Kalmia Realty & Insurance Company v. United States,

No. 12,965, on the docket of the court, and that the judg-

_—

ment of said court may be reversed, and appropriate

rectification here had.

Jupce Bren Stevens,

Hattiesburg, Mississippi;

J. R. Bucwanan,

L. Barrett Jonss,

Jackson, Mississippi;

Watter 8. WELcH,

Garner W. GREEN,

Wetcu, Cooper & WELCH,

Laurel, Mississippi;

BucHanan & MonTGoMERY,

Laurel, Mississippi;

GrEEN, Green & CHENEY,

801 Standard Life Building,

Jackson, Mississippi,

Of Counsel.

ie te aa

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1950

No. 247

KALMIA REALTY & INSURANCE COMPANY, ET AL.,

Petitioners,

vs.

UNITED STATES OF AMERICA,

Respondent

BRIEF FOR PETITIONERS

Opinions Below

There is no opinion by the District Judge but findings of

fact and conclusions of law are printed Tr. 391, 407 and 421.

The opinion of the Court of Appeals filed May 15, 1950, is

reported Kalmia Realty & Insurance Co. v. United States

of America, 181 Fed. 2d 598, is in the record at page 444 -—

is made Appendix ‘‘ A’? to this brief.

Basis for Jurisdiction

The statement showing the grounds upon which jurisdic-

tion of this Court is invoked is set forth at page 1 of the

foregoing petition and is by reference adopted as a part

of this brief.

pai’ PPT LAM

pes GPRNO NN RRNA RESPOND wre

Statutes Involved

Those herein set forth.

Statement

The material facts have been set forth in the summary

statement at pages 1-12 et seq., of the preceding petition

and such statement is by reference adopted as part of this

brief.

ARGUMENT

Port I

Rectification of Conflict Between (a) State of Washington

v. United States, 87 Fed. 2d 421, CCA 9th, and (b) the

Decision Herein by the Court of Appeals for the Fifth

Circuit Requisite in This Court.

1. The District Court specifically found jurisdiction (Tr.

391) affirmed by the Court of Appeals (Tr. 445).

2. Where either equity jurisdiction is lacking (Hipp v.

Babin, 19 How. 278, 15 S. Ct. 633), or Federal diversity

jurisdiction, does not appear (Indianapolis v. Chase National

Bank, 314 U.S. 63, 86 L. ed. 47), sua sponte the court will act

(State of Texas v. State of Florida, 306 U.S. 398, 83 L. ed.

817; Atlas Life Ins. Co. v. W. I. Southern, Inc., 306 U. 8.

563, 83 L. ed. 987).

3. The conflict between the Ninth Circuit and the Fifth

Circuit :

(a) In 87 Fed. 2d at page 423, it is said:

‘‘Suit by the United States against the Columbia

River Packers Association and others, in which the

States of Washington and Oregon filed motions for

leave to intervene. From a decree for plaintiff (U. 8.

v. Columbia River Packers Ass’n, 11 F’. Supp. 675), the

defendants appeal, and from orders denying their re-

spective motions for leave to intervene, the States of

Washington and Oregon separately appeal.’’

Therein there was a lease by the State, and the United States

sought cancellation without the State, lessor, being thereto

a party, whereof the Ninth Circuit thus held:

‘If we accept this statement that the decree decided

the title to the property, it is apparent that in the in-

stant case, appellant State of Washington, is an in-

dispensable party. To test the soundness of this rule,

it is well to consider what happens when a term for

years is granted. When an estate for years is granted,

the grantor divests himself of the right of possession

for the term specified. At the end of that term this

right of possession passes or reverts to the grantor by

operation of law—a process which is called ‘rever-

men en,

* * * * « * *

“‘The right of possession having been granted by the

grantor, the latter, of course, does not again acquire

that right until the term, for which he has granted it,

terminates. Such right of possession, upon termination

of the term, then reverts to the grantor. While this

right of possession is in the lessee, a decree, in a suit

brought against the lessee by a third party adjudicating

that such lessee has no title or right of possession, be-

cause his grantor had none to convey to him, directly

adjudicates against that right, by adjudicating that

such right of possession was in neither the lessor nor

the lessee. The lessor is affected (not in the sense that

he is concluded by the decree as res adjudicata), because

the thing, which he claims he owned at the time of the

grant to the lessee, and which he claims will revert to

him is declared by the decree to be non-existent. Such

a decree then does have an effect on the lessor’s rights,

for at the termination of the term, under the decree the

right of possession could not revert to the lessor.’’

PR SAS

Compare Delno v. Market St. Ry. Co., 124 Fed. 2d 965, 968,

C. C. A. 9th, where that wherefor we herein contend was

_ accurately epitomized.

(b) This rule, though approved widely, was herein denied

application when the United States, after making commer-

cial leases for oil to the major oil companies, alone brought

suit against the defendants, Kalmia and Hendrix to con-

firm the entire mineral estate, just as it had done in the

Washington case, supra. As at the date of the institution

of this suit, the property rights (if the United States was

the owner of the oil, which we deny) are thus defined by

Mississippi’s court in Koenig v. Calcote, 199 Miss. 435, 25

So. 2d 763, 766:

‘«* * * when the Calcotes executed the oil and gas

leases in favor of the Sun Oil Company they had left

in them, first, a reversionary fee interest in the oil, gas

and other minerals, if and when the oil and gas lease

should ‘for any reason’ become canceled or forfeited,

second the right to receive the rentals and royalties

during the life of the lease * * *.’’

But, as further therein defined, the lessees (these major

oil companies) claim a determinable fee in the minerals

whereasto alone this controversy is, and the mineral estate

thus claimed to be vested might be at the pleasure of the

lessee worked to exhaustion, as said in the Koenig case at

page 765:

‘««* * * Said conclusions also fail to take into

account the fact that the estate held by the Sun Oil

Company at the time of the execution of the deed was

a determinable fee, Lloyd’s Estate et al. v. Mullen

Tractor & Equip. Co., 192 Miss. 62, 4 So. 2d 282, * * *.”

See, also, Gulf Refining Co. v. Stanford, 202 Miss. 602, 30

So. 2d 516; Bailey v. Federal Land Bank of New Orleans,

207 Miss. 764, 43 So. 2d 375; Calcote v. Texas Pacific Coal

& Oil Co., 157 Fed. 2d 216, C. C. A. 5th. This interpretation

— |

of estates in land by the state supreme court is conclusive

here. Compare Edward Hines Yellow Pine Trustees v.

Martin, 268 U. S. 458, 69 L. ed. 1050; Memphis Natural Gas

Co. v. Stone, 335 U.S. 80, 92 L. ed. 1832; International Union

of U. A. A. € A. v. O’Brien, — U.S. —, 94 L. ed. 559, 660;

International Oil Pipe Line Co. v. Stone, 337 U. S. 662, 93

L. ed. 1613.

4. So, when the United States instituted this action to

recover the minerals whereasto this controversy is, it af-

firmatively appears:

(a) That before the institution of this suit the United

States had conveyed a determinable fee through the leases

to these several oil companies and had given the right of

unconditional user and thereafter could possess only a pos-

sibility of reverter, whereunder it might not sue to recover

that it had conveyed to another, but of course might protect

its delay rental and royalty. Compare Finkbine Lumber

Co. v. Saucier, 150 Miss. 446, 116 So. 736, 737; Smith v. Sal-

men Brick & Lbr. Co., 151 Miss. 329, 118 So. 179; Minor on

Real Property, Vol. 1, Sec. 780, p. 1012.

Compare, also, Prall v. Burckhartt, 299 Ill. 19, 132 N. E.

280, and Annotation 18 A. L. R. 1008, subsection II; Richard-

son v. Holman, — Fla. —, 30 So. 2d 641. See, also, 31 C.J. 8S.,

‘‘Kstates’’, Sec. 105, p. 125, referring to and approving

21 C. J. 1017.

Therefore, while this possibility of reverter of the

minerals thus conveyed after a determinable fee is presently

alienable under Mississippi statutes as an ‘‘interest’’, its

fundamental nature of not being an estate—of being wholly

contingent, of being destructible by legislation—continu-

ously remains. Compare 33 Am. Jur., p. 683. So that, quo ad

the oil, the United States, after these leases, had not that

which is here in controversy—there is no controversy other

or further—only a possibility of reverter with royalty reser-

vation, and having such a right is subject to those disabilities

of suing thereon inherently incident. These major oil com-

panies who possess under this deed this mineral fee are

surely indispensable parties.

(b) Conversely, these major oil companies owning this

determinable fee have that which in the above quoted cases

under a rule of property—( Wisconsin Lumber Co. v. State,

97 Miss. 571, 54 So. 247; Forest Product & Mfg. Co. v. Buck-

ley, 107 Miss. 897, 66 So. 279)—constitutes the entire title

to the minerals, except, of course, possible royalty when, if

and after production is struck. These major oil companies,

quo ad the oil, claimed to have the exclusive right to enter,

produce and remove, accounting after production to the

United States only as to a royalty. On an arbitrary basis,

therefore, we may assume and so do that the interest claimed

to be in the major oil companies is at least 7/8ths with right

of possession, and in the United States 1/8th without the

right of possession, and so having, are not presently in any

way before the Court.

Petitioners do not controvert Federal jurisdiction so far

as the rights of the United States, as plaintiff properly

suing, are concerned, but when the fee is vested with the

exclusive right of possession under these leases in these

major oil companies, there is no jurisdiction shown in the

District Court by reason of diversity or a Federal question

not therein appearing, for as to this mineral fee these major

oil companies may not sue in the Federal court as a matter

of right unless there be diversity or other basis for Federal

jurisdiction (Skelly Oil Co. v. Philips Petrolewm Co., —

U. S. —, 94 L. ed. 845), and when the District Court con-

firmed in the United States the entire mineral fee, it com-

mitted a palpable error, when it knew that as to a determi-

nable fee in the oil with an exclusive right to develop these

major oil companies claimed to be the owners thereof. With

deference, the District Judge and the Court of Appeals

atl

flagrantly departed from the proper rule established in the

Ninth Cireuit. The extent of the major oil companies’

claimed ownership appears in the exhibits transmitted with

the record.

Point II

Oil Underlying Surface Acquired under the Weeks Act Re-

mains Subject to Paramount State Sovereignty and Non-

Discriminatory Ad Valorem State Tax Thereon Validly

Foreclosed Vested Title in Petitioner, Hendrix, the Power

of Mississippi to Impose Ad Valorem Taxation Supreme.

(a) The Weeks Act (March 1, 1911, Ch. 186, 36 Stat.

961-963, as amended, 37 Stat. 855, 38 Stat. 441, 43 Stat.

654, 43 Stat. 1215, and 49 Stat. 1225, Title 16 U. S. C. A.,

Sees. 480, 500, 513-519, 521, 552 and 563, hereinafter called

‘‘Weeks Act’’). Herein, we make no challenge as to the

constitutionality of this act insofar as and to the extent

that it covers (a) timber, (b) surface, and (c) all factors

essential to regulate navigation, but if the act be construed

as to the sovereign taxing power of the State to cover a

reservation in the underlying oil in no way within the pur-

pose of the Act, then thereasto as against the State’s

sovereign taxing power this Act is void.

(b) But properly construed and as held by this Court,

the Weeks Act as to oil leaves state sovereignty unimpaired.

The District Judge invalidated Hendrix’s title to the oil

solely under New Brunswick v. United States, 276 U. 8S.

547, 72 L. ed. 693, wherem the United States under the

war power had acquired, presumptively with the consent

of New Jersey, certain lots whereon dwellings were erected

to effectuate the war effort. Thereafter, on dissolution

these lots were sold substantially with a deed to the pur-

chaser with the reservation of a paramount lien to the

United States to secure the unpaid balance, and as to (a)

land, and (b) the war power, this Court held that, quo ad

—y,

the unpaid purchase money, there might not be a foreclos-

ure of the tax lien unless and except the same fully pro-

tected the Government. Substantially reaffirmed in S. R. A.

v. Minnesota, 327 U. S. 558, 90 L. ed. 851. See, also, West

v. Oklahoma Tax Com., 334 U.S. 723, 92 L. ed. 1680; United

States v. Allegheny County, 322 U. S. 174, 88 L. ed. 1209.

But, with deference, these cases are neither controlling

nor persuasive because this Court recognizes the increasing

social demands upon the states and that their sole recourse

for the protection and welfare of the citizens is the taxing

power. Compare Oklahoma Tax Commission v. The Texas

Company, 336 U. S. 342, 93 L. ed. 721, whereasto it was

declared, p. 736:

scc# * * Tn the light of the expanding needs of

State and Nation, the inquiry has been pressed whether

this conclusion has adequate basis. . . .’ 303 U. S. at

384.”’

The demarcation between national sovereignty and state

sovereignty, quo ad taxation of oil, presents a question on

the constitutional level, and as to the conflict between these

sovereignties this Court there declared in the Oklahoma

case, page 732:

‘‘Our present problem lies on the constitutional level.

It requires reconsideration of former decisions spe-

cifically in point, together with later ones deviating

in rationale. It is of substantial importance both for

the states’ powers of taxation and for the subjects on

which they may impinge. Moreover, even though the

immediate questions are closely related to federal pol-

icies concerning Indian Lands, they are equally tan-

gent to considerations affecting other types of situa-

tions raising questions of immunity.’’

This Court further therein declared (p. 732) :

“‘Tt is true that this Court’s more recent pronounce-

ments have beaten a fairly large retreat from its for-

merly prevailing ideas concerning the breadth of so

called intergovernmental immunities from taxation, a

retreat which has run in both directions—to restrict

the scope of immunity of private persons seeking to

clothe themselves with governmental character from

both federal and state taxation. The history of the

immunity, by and large both aspects, represents a ris-

ing or expanding curve tapering off into a falling or

contracting one.’’

This Court said in West v. Oklahoma Tax Commission,

334 U. S. 723, 92 L. ed. 1680:

‘*Since 1819, when M’Culloch v. Maryland, 4 Wheat

(U. 8S.) 316, 4 L. ed. 579, was decided, it has been estab-

lished that the property of the United States is im-

mune from any form of state taxation, unless Con-

gress expressly consents to the imposition of such lia-

Me es,

As was said by Mr. Justice Black in Mulane v. Central

Hanover Bank &@ Trust Co., — U. S. —, 94 L. ed. 578, 582:

‘‘The legal recognition and rise in economic im-

portance of incorporeal or intangible forms of prop-

erty have upset the ancient simplicity of - Reaaates law

and the clarity of its distinctions, * *

The status of oil as property is almost a complete anom-

aly under the common law and whether this Court will

hold (a) that its status must be determined under the Fed-

eral law (United States v. Nebo Oil Co., 90 F. Supp. 73) or

(b) under the law of Mississippi (Merrill Eng. Co. v. Capi-

tal Nat. Bank, 192 Miss. 378, 5 So. 2d 666; Stokely v. State,

149 Miss. 435, 115 So. 563), is as yet not definitely settled

as to the Weeks Act though thereunder the United States

has acquired in Mississippi 1,003,215 acres, Tr. 96, and has

exercised power under this statute in forty-one of the

states, and yet the status of this most important war ma-

terial, oil, has not been adjudicated. Compare Rist v. Toole

County, — Mont. —, 159 P. 2d, 340, 162 A. L. R. 402; Cala-

han v. Martin, 3 Cal. 2d 110, 43 P. 2d 788, 101 A. L. R. 872;

McIntosh v. Vail, 126 W. Va. 395, 28 S. E. 2d 607, 151 A. L. R.

804; Toothman v. Courtney, 62 W. Va. 177, 58 S. EH. 915;

and Gulf Refining Co. v. Stone, 197 Miss. 713, 21 So. 2d 19.

But see Hendrix v. Foote, 205 Miss. 1, 38 So. 2d 111, Ap-

pendix ‘‘D’’,

I. Uniform Coordination in This Court Requisite under Ad-

ministrative Policy of the National Fores* Reserva-

tion Commission Which, With Deference, Contra-

venes Expressly the Decisions Below That Leasing

in Standard Form With Actual Prospecting Done

Constitutes a Commercial Advantage.

As epitomized in United States v. Nebo Oil Co., 90 F.

Supp. 73, it was as to the policy of the United States under

the Weeks Act properly judicially held:

(a) Congress did not appropriate a single cent for min-

eral acquisition.

(b) As to the authority of the Secretary, that court

said (p. 86):

‘¢ «The first question which therefore arises is as to

whether large investments in mineral values would

be in accord with the purpose and intent of the Weeks

Law (16 U.S. C. A. Sees. 480, 500, 513 et seq., 521,

552, 563) and Clarke-McNary Law (16 U. S. C. A.

Sees. 471, 505, 515, 564 et seq.) which primarily were

designed to promote the protection of navigable streams

and the production of timber supplies. With practically

limited appropriations available for purchase work and

with the acquisition requirements largely in excess of

the available appropriations, every dollar expended

in payment for mineral values would be one dollar

less available for the purchase of lands to carry out the

primary purposes of the Acts and appropriations, One

logically nray inquire whether in the event Federal

acquisition of mineral deposits is deemed desirable,

the cost of their acquisition should not be borne by

other appropriations’.’’

is not contrary to the spirit of the Act, but in general (90

F. Supp. 86):

‘** ‘So far as can be foreseen, the net effect accruing

from the exercise of the retained mineral rights will

generally be beneficial rather than detrimental to good

forest management. Oil and gas development in the

Allegheny Purchase Area seldom involves the with-

drawal from timber production of more than one per

cent of the surface, much of this is carefully cleared

and patrolled pipe-line rights-of-way. The fire pre-

ventive measures of the oil men contribute more to

timber production than would the use of the small sur-

face areas they occupy. * * *’.’’

(d) Herein the cash consideration was only $1.35 per

acre against the average figure in Mississippi of $3.53 per

acre for 1,003,215 acres wherein was included 18,000 acres

of timber at $42.81 per acre, Tr. 96.

(e) In many instances reservations of the minerals in

fee were allowed without question when insisted upon, and

that here requisite is the fitting of the statute into the pic-

ture perfected by the interpretation of the National Forest

Reservation Commission. Under the Weeks Act, as imple-

mented by the National Forest Reservation Commission,

the inferior courts have not correctly as to Kalmia vouch-

safed that whereto as a citizen it was in good faith entitled

to at the hands of a government at war. We animadvert,

with deference, the responses made by the government to

the interrogatories propounded, clearly concealing the uni-

form policy of the government of vouchsafing mineral reser-

vation to the land owner when such land owner insisted

upon it. Tr. 80-97.

(f) The evidence in this record is uncontradicted, with

deference, that Kalmia and those claiming under it thus

did assert the right to retention of the minerals but under

overwhelming pecuniary pressure were compelled to ac-

cede to the demands of the local Forestry representatives

who were unwilling to give that whereto Kalmia was law-

fully entitled—mineral reservation in fee—and it thus be-

comes absolutely imperative that this Court fit this reser-

vation into the terms of the statute as interpreted by, not

the local representative, but by the National Forest Reser-

vation Commission itself, and thus interpreting, with def-

erence, commercial advantage unquestionably occurred with

an extension certainly for a period of five years. Compare

2 Summers Oil and Gas, Ch. 10, Sec. 301, p. 159; Conti-

nental Oil Co. v. Osage Oil & Refining Co., C. C. A. 10th,

69 Fed. 2d 19, 23, wherein it is said:

‘Where the lessor refuses to give possession to the

lessee or wrongfully obtains an injunction against the

lessee restraining operations on the land, it has been

held that the definite term will be treated as extended

for the length of time that the lessee is thus kept out

of possession or restrained from operations by the

wrongful act of the lessor. Stahl v. Van Vleck, 53

Ohio St. 136, 41 N. E. 35; Standard Oil Co. of La.

v. Webb, 149 La. 245, 88 So. 808.

‘““The conduct of the lessor may create an estoppel

which will preclude him from asserting a termination

of the lease because of non-production at the expira-

tion of the definite term. Ohio Fuel Oil Co. v. Green-

leaf, 84 W. Va. 67, 99 S. E. 274; Hodges v. Miller

(Tex. Civ. Anp.), 244 8S. W. 634.”’

See, also, Smith v. Salmen Brick & Lhbr. Co., 151 Miss. 329,

118 So. 179; therein having been of counsel the record shows

—

a denial of the land owner of the right to remove the timber

with skidders wherefor there was such right and the court

upon the right being denied by the land owner extended

the term. Herein, the United States being at war, it would

have been substantially treason to have defied the Govern-

ment at the time it took possession. The lower courts held

notwithstanding the interpretation by the National Forest

Reservation Commission (which interpretations were not

submitted to the Court of Appeals by reason of the manner

in which the interrogatories were answered) and had this

interpretation by the Commission been submitted to the

courts, it well may have been that they would not have

taken the view that ‘‘commercial advantage’’ required

actual production, especially as these lands were under

lease by Kalmia with the right in the lessee to enter and

drill, the deed specifically providing that if drilling were

being had at the expiration date extension, per se, occurred.

In view of the administrative determination by the Na-

tional Forest Reservation Commission, the construction

by the Court of Appeals of the reservation amounted to

a crucifixion. It took from Kalmia that wherefor the Gov-

ernment had not paid and whereasto full title with plenary

removal rights was specifically reserved to be retained by

Kalmia without interference by the Government and when

Kalmia was doing and had done precisely that subsequently

done by the United States, the receipt of $15,311.70 was

unquestionably a commercial advantage extending the time.

II. Under the Original Reservation Kalmia Had the Un-

questioned Right to Remove All Oil, Being Possessed

Thereof as of a Determinable Fee, the Tax Sale

Thereof Valid.

For the oil, the United States had paid naught and as

owner Kalmia might have executed a perpetual oil lease

reserving a fixed rental payment. Compare Lloyd’s Estate

v. Mullen Tractor & Equip. Co., 192 Miss. 62, 4 So. 2d, 282,

approved in Koenig v. Calcote, 199 Miss. 435, 25 So. 2d 763;

Anderson v. Sun Oil Co., — Miss. —, 42 So. 2d 238. Under

this reservation with this right of absolute removal with-

out impinging upon the right of the United States, thereasto

Kalmia possessed the mineral fee and the United States

possessed a possibility of acquisition after Kalmia had

exercised its paramount property rights. As was said in

Finkbine Lumber Co. v. Saucier, 150 Miss. 446, 116 So.

736, 737:

‘Under the deed by which the appellees conveyed

the timber to Field, they had a possibility of reaequir-

ing the timber by its reverting to them in event it

should not be cut and removed from the land within

the time limited in the deed therefor. Ladiner v. In-

gram Day Lumber Co., 135 Miss. 632, 100 So. 369. It

is true that this possibility, known as ‘possibility of

reverter’ (Crorow Hardwood Co. v. Burks (Miss.), 115

So. 585; Memphis & Charles R. R. Co. v. Neighbors,

51 Miss. 412; Vicksburg & Meridian Railroad Co. v.

Ragsdale, 54 Miss. at page 216) was a bare possibility,

and not one coupled with an interest (Challis’s Real

Property (3d Ed.) note on page 76), and therefore

inalienable at common law. * * *.’’

Approved in Sumter Lumber Co. v. Skipper. 182 Miss. 595,

184 So. 302.

Where there is complete ownership of the oil in Kalmia

with plenary power to remove and only a possibility of

reverter in the United States, the state’s taxing power,

quo ad Weeks Act mineral reservations, is supreme. Com-

pare United States v. Burnison, 338 U. S. 87, 94 L. ed. 433,

436, wherein it is said:

‘‘The Fox Case is only one of a long line of cases

which have consistently held that part of the residue

of sovereignty retained by the states, a residue insured

by the Tenth Amendment, is the power to determine

the manner of testamentary transfer of a domiciliary’s

property and the power to determine who may be

made beneficiaries. It would be anomalous to hold that,

because of an amorphus doctrine of national sov-

ereignty, federal constitutional law reached into a

California statute and made impotent that state’s re-

strictions on the designation of beneficiaries.’’ (Km-

phasis ours.)

See, also, United States v. Fox, 94 U.S. 315, 24 L. ed. 192.

By Section 112 of Mississippi Constitution, fundamentally

altering the Constitution of 1869, it was explicitly provided:

‘‘Taxation shall be uniform and equal throughout

the state. Property shall be taxed in proportion to its

value. * * * Property shall be assessed for taxes

under general laws, and by uniform rules, according

to its true value. * * * But all such property shall

be assessed at its true value, and no county shall be

denied the right to levy county and special taxes upon

such assessment as in other cases of property situated

and assessed in the county.’’

And in Mississippi the proceeding is in rem. Compare

Mississippi Code of 1942, Section 9744. A tax sale pursuant

thereto divests contingent interests. Compare Merrill

Eng. Co. v. Capital Nat. Bank, 192 Miss. 378, 5 So. 2d 666,

approving Jackson v. Ashley, 189 Miss. 818, 199 So. 91.

Thus when the United States only possessed this possi-

bility of a reverter with the entire beneficial interest vested.

in an individual, it was competent for Mississippi to sell

for a default in payment of its taxes that thus individually

owned. Compare United States v. County of Allegheny,

322 U. S. 174, 187, 88 L. ed. 1209, 1219, wherein it is said:

_ es * We have held that where private interests

in property were so preponderant that all the Govern-

ment held was a naked title and a nominal interest, the

whole value was taxable to the equitable owner. North-

ern P. R. Co. v. Myers, 172 U. S. 589, 43 L. ed. 564, 19

S. Ct. 276; New Brunswick v. United States, 276 U. S.

547, 72 L. ed. 693, 48 S. Ct. 371. * * °7.

Compare United States v. Kansas City Life Ins. Co., —

U. S. —, 94 L. ed. 896, 905, in the dissenting opinion, Mr.

Justice Minton said:

‘cee * 6* not all economic interests are ‘‘prop-

erty rights’’; only those economic advantages are

‘‘rights’’ which have the law back of them, and only

when they are so recognized may courts compel others

to forbear from interfering with them or to compen-

sate for their invasion.’ United States v. Willow

River Power Co., 324 U. S. 499, 502, 89 L. ed. 1101,

1107, 65 S. Ct. 761.”’

See, also, 33 Am. Jur., p. 683, wherein it is said:

‘««* * * Tt seems that a mere possibility of reverter

may be defeated by statute, because such possibility

of reverter, being a mere expectation of property in

the future, is not a vested right, and may be changed,

modified, or abolished by legislative action.’’

Compare 31 C.J.S., ‘‘ Estates’’, Sec. 105, p. 125.

This deed must be construed in the light of the purpose

of the Act whereasto it was said in United States v. Nebo

Oil Company, 90 F. Supp. 73, 99:

‘«* * * Commission has taken the position that it

is not authorized to purchase minerals with funds ap-

propriated for the purchase of lands for forest pur-

poses.

‘The Commission and the Department of Agriculture

have repeatedly recognized that the ownership of the

mineral rights by third persons will not interfere with

the purposes for which the land was being acquired and

have stated that the ownership of oil and gas rights by

third persons are a positive benefit because they pro-

vide excellent fire control. * * *.”’

So, when Kalmia owning absolutely the oil defaulted in

the payment of the tax imposition made by Mississippi

hereasto and Hendrix purchased all the oil under a perfect

title by a proceeding in rem, the fact that the United States

owned the surface and timber and Hendrix under the state

sale owned the oil with a right to remove it without impair-

ing the United States’ rights in the surface (compare

McNeese v. Renner, 197 Miss. 203, 21 So. 2d 7; Pace v.

State, 191 Miss. 780, 4 So. 2d 270), there was as between the

sovereignties presented a not unusual condition and one in

which the United States was not authorized to forfeit

the foreclosure title vested by the State of Mississippi

for a mere failure to remove within the time required the

oil therefrom. Compare Peterson v. Gibbs, 147 Cal. 1,

81 Pac. 121, wherein it is said:

‘Here there is absolutely nothing in the terms of the

agreement which can be construed as making the re-

moval of the timber a condition precedent to the pass-

ing of the title, or in case delay in such removal, beyond

the period of ten years from the date of the instrument,

or a failure to pay the rental reserved or one-half

of the taxes, to operate as a divesting of the title con-

veyed. The terms of the instrument literally signify

as absolute conveyance of timber, and there is nothing

in the provisions relied upon by the plaintiff to impair

the plain words of the present grant.”’

In Halstead v. Jessup, 150 Ind. 87, 49 N. E. 821, it is said:

The law does not favor forfeitures and will not en-_

force them in the absence of clearly stated conditions

of forfeitures. Here, as we have stated, there is no

stated condition of forfeiture. If by delay in taking

the timber, after the period named, damage would

accrue to the owner of the land, it would not be ques-

tioned that such damage could be recovered, but it

would be manifestly unjust that mere delay should

forfeit both appellant’s money and his timber, and that

the appellee should become the owner of the timber

upon the strength of an implied forfeiture.’’

Compare Alexander v. Bauer, 94 Minn. 146, 102 N. W. 388;

Irons v. Webb, 41 N. J. L. 204; Mathews v. Mulvey, 38 Minn.

342; Stuckley v. Butler, Hob. 300; Gregg v. Birdsall, 53

Barb. 405; Paterson v. Graham, 164 Pa. St. 241; Knotts

v. Hydrick, 12 R. Law. 314; Johnson v. Truitt, 122 Ga. 327,

50 S. E. 136; Peace v. Gibson, 6 Me. 83; Howard v. Lancoln,

12 Me. 122; Davidson v. Moore, 37 S. W. 206; Hott v. Strat-

ton Mills, 54 N. H. 109.

In this aspect, the purchaser was entitled to a judicial

hearing as to whether or not the receipt of $15,311.70 and

the method of working constituted a ‘‘commercial advan-

tage’’, compare Wisconsin Elec. Power Co. v. United States,

336 U. S. 176, 93 L. ed. 591, and before the United States

might take from Hendrix that precedently in him vested it

was requisite that hereasto he be vouchsafed a judicial hear-

ing. Compare Mulane v. Central Hanover Bank & Trust

Co., — U.S. —, 94 L. ed. 578, 583, wherein it is said:

‘‘Many controversies have raged about the cryptic

and abstract words of the Due Process Clause but there

can be no doubt that at a minimum they require that

deprivation of life, liberty or property by adjudica-

tion be preceded by: notice and opportunity for hearing

appropriate to the nature of the case.’’

And yet herein the United States was not subject to suit.

Compare Perry v. United States, 294 U. S. 330, 79 L. ed.

912. Yet Hendrix was entitled under the Fifth Amendment

to this protection and being so thus entitled the deed could

only be made law conforming by construing the provisions

hereasto, if essential, as covenants and not conditions, and

this, Mississippi’s law required. Compare Memphis ¢

Charleston R. R. Co. v. Neighbors, 51 Miss. 412, 418:

‘*A court of equity declines to lend its aid to enforce

a forfeiture. Judge Story lays down the doctrine

broadly, ‘that it will never enforce either a penalty or

a forfeiture’; and adds, ‘therefore it will never aid in

the divestiture of an estate for a breach of a covenant

on a condition subsequent, although it will often inter-

fere to prevent the divestiture of an estate for a breach

of covenant or condition. 2 Eq. Jur., Sec. 1319. In the

case of Livingston v. Tompkins, 4 Johns. Ch, 430, Chan-

cellor Kent declared it was ‘contrary to the uniform

course of the court and its established principles to

aid in divesting an estate for breach of condition sub-

sequent.’ ’’

Compare Natchez v. Thornton, 88 Miss. 1, 41 So. 498; 4

Thompson on Real Property, Sec. 2044, p. 571.

Additionally, the District Judge and the Court of Appeals

held the provision herein as to the location of the well and

twenty-five acres thereabout void, and under Ates v. Ates,

189 Miss. 226, 196 So. 243, where the exception is void, the

estate is not divested. So that when, under these circum-

stances, the entire estate in the minerals being individually

vested on September 21, 1942 in Kalmia and the paramount

lien of the state in rem being thereasto exercised, an uncon-

ditional fee in that vested in Kalmia passed to Hendrix and

thereasto the United States should have been content with

that provision made by the Secretary and integrated into

this deed providing, Tr. 24:

‘2. In prospecting for, and in mining and removing

minerals, oils, and gas, and in manufacturing the prod-

ucts thereof, only so much of the surface shall be

occupied, used or disturbed as is necessary for the

purpose.’’

And any provision integrated into this deed in conflict

therewith might well here be regarded as void. Compare

Chapman v. Sheridan-Wyoming Coal Co., 338 U. S. 810,

94 L. Ed. 307, 312:

‘«The only claim of law violation is that the Secretary

is proposing to violate his own regulation, promul-

gated pursuant to the Act and hence having the force of

law. That it binds him as well as others while it is in

effect is not doubted.’’

The effect of the provisions by Donald M. Nelson, Director

of Priorities, and of the Petroleum Administrator will be

later more fully developed by integrating these as well as

the interpretation made in Wilson v. Cook, 327 U. 8. 474, 90

L. Ed. 793, and the express terms of Sec. 486, Title 16 U.S.

C. A., ‘‘National Forests’’.

We do assert that the title of Hendrix was absolute. In

fairness to the District Judge he did on the bench express

serious doubt as to the correctness of his decision hereasto

and we, with deference, submit that when this sale was

made the fee vested in Hendrix under the state’s sovereign

taxing power.

Ill. Assuming for the Sake of Argument that the United

States Had Obtained a Vested Estate in the Oil under

the Weeks Act, Still Such an Estate as to Oil Was

Held Not in a Governmental Capacity But in a Pri-

vate Capacity and Being So Held Was Subject to

Divestiture Through Foreclosure of Paramount State

Ad Valorem Tax Lien.

The United States claimed solely under the Weeks Act,

Tr. 81. Compare Wilson v. Cook, 327 U. 8. 474, 90 L. Ed.

793. The United States as a nation might make acquisitions

of land for other than the purposes prescribed in Art. 1, Sec.

8, subsection 17, of the Constitution, Collins v. Yosemite

Park & Curry Co., 304 U. S. 518, 82 L. Ed. 1502, but subject

to the rights prescribed in the consent given by the State,

and assuming said consent of Mississippi to have been

validly given (for consent statute, see Appendix ‘‘C’’),

which we question, the United States, quo ad the oil, was

engaged in a private—non-governmental—business enter-

prise with profit as an incentive. That being done varied

naught from that which might have been done by a private

oil company under its dominium but subject to the imperium

of the sovereign State, and so when the United States was

thus engaged in that which was strictly a non-governmental

but competitive commercial enterprise thereasto Mississippi

sovereignty rendered the Government’s property amendable

to its tax laws. Compare South Carolina v. United States,

199 U. S. 437, 50 L. Ed. 261, 264, wherein it is said:

‘‘The important question in this case is whether per-

sons who are selling liquor are relieved from liability

for the internal revenue tax by the fact that they have

no interest in the profits of the business, and are simply

the agents of a state which, in the exercise of its sov-

ereign power, has taken charge of the business of selling

intoxicating liquors.

‘*We pass, therefore, to the vital question in the case,

and it is one of far-reaching significance. We have in

this republic a dual system of government,—national

and state,—-each operating within the same territory

and upon the same persons, and yet working without

collision, because their functions are different. There

are certain matters over which the national government

has absolute control, and no action of the state can inter-

fere therewith, and there are others in which the state is

supreme, and in respect to them the national govern-

ment is powerless. To preserve the even balance be-

tween these two governments, and hold each in its sepa-

rate sphere, is the peculiar duty of all courts; pre-

eminently of this,—a duty oftentimes of great delicacy

and difficulty.

‘*Now, if it be well established, as these authorities

say, that there is a clear distinction as respects respon-

sibility for negligence between the powers granted to a

corporation for governmental purposes and those in

aid of private business, a like distinction, may be recog-

nized when we are asked to limit the full power of im-

posing excises granted to the national government by

an implied inability to impede or embarrass a state in

the discharge of its functions. It is reasonable to hold

that, while the former may do nothing by taxation in

any form to prevent the full discharge by the latter of

its governmental functions, yet, whenever a state en-

gages in a business which is of a private nature, that

business is not withdrawn from the taxing power of the

nation.’’ (Emphasis ours)

Compare Willmette Park District v. Campbell, 338 U.S. 411,

94 L. Ed. 177; New York v. United States, 326 U. S. 572,

90 L. Ed. 326; Allen v. University System, 304 U.S. 489,

82 L. Ed. 1448; Helvering v. Powers, 293 U.S. 214, 79 L. Ed.

291; and Ohio v. Helvering, 292 U.S. 360, 78 L. Ed. 1307.

The increasing social needs of the state may only be met

from taxes as hereinabove shown. The taxation of oil in

Mississippi is a principal source of revenue. See Appendix

‘‘K’’, And that tlius at issue is when ex gratia the govern-

ment took from Kalmia (if it so did) this oil without com-

pensation, and without disclosing to Kalmia that it could not

pay therefor (United States v. Nebo Oil Company, 90 F.

Supp. 73) and wrongfully failed to disclose the settled policy

of the National Forest Reservation Commission that min-

eral retention was conservative of navigation and reforesta-

tion (compare the want of frankness in the answers to

interrogatories propounded to the United States Tr. 80

wherein the fundamental policy of the government was, we

submit, wrongfully concealed) and as a governmental secret

refused to disclose the realizations from leases, Tr. 353,

which we are at liberty to presume equalled at least three-

quarters of a million dollars secured from the recited consid-

erations, the presumption is based on retaining all of the

surface and all of the timber and disposing of naught requi-

site to conserve the constitutional functions of the United

States as to navigation and timber. We submit that the

same declaration made by Mr. Justice Brewer as to the

liquor business in Carolina is applicable to the oil business

under the Weeks Act land in Mississippi. For in acquiring

the surface and the timber had the government been frank

and honest with Kalmia as we submit it was obligated to do

when dealing with its subjects, Kalmia just as the Walkers,

just as the thousands of other citizens, would have retained

this oil and Mississippi’s sovereignty hereasto remained

paramount because that done, quo ad oil, was purely a busi-

ness venture whereasto the United States, with deference,

was without power. Compare United States v. Burnison,

339 U. S. 87, 94 L. Ed. 434; United States v. Fox, 94 U. S.

315, 24 L. Ed. 192. The states might thus engage. Compare

Jones v. Portland, 245 U. 8S. 217, 62 L. Ed. 252; Green v.

Frazier, 253 U. S. 233, 64 L. Ed. 878; Everson v. Board of

Education, 330 U.S. 1, 91 L. Ed. 711; Family Life Ins. Co. v.

Daniel, 79 F. Supp. 62. The United States could have, quo

ad that thus done, asserted its taxing power to the extent

that the action was not governmental, but in such business

the United States may not engage not having hereasto the

delegated power. Compare Kidd v. Pearson, 128 U. 8S. 120,

32 L. Ed. 346, but compare Collins v. Yosemite Park &

Curry Co., 304 U. 8. 518, 82 L. Ed. 1502. See, also, Susque-

hanna Power Company v. State Tax Commission, 283 U. S.

291, 75 L. Ed. 1042, 1045, wherein it is said:

‘‘ Assuming, for present purposes, that the license of

the Power Commission is a federal instrumentality,

immune from taxation or other direct interference by

the state, it does not follow that the property appellant

uses in its power project is clothed with that immunity.

The exemption of an instrumentality of one government

from taxation by the other must be given such a prac-

tical construction as will not unduly impair the taxing

power of the one or the appropriate exercise of its func-

tions by the other. * * *.’’

The state did not seek to tax the surface requisite for Fed-

eral fundamental purposes so far as this record is concerned.

There is under Mississippi law a lateral segregation between

timber, surface and minerals, each quo ad the taxing power,

possessing a distinct severability. Compare Fox v. Pearl

River Lumber Co., 80 Miss. 1, 30 So. 583; Butterfield Lumber

Co. v. Guy, 92 Miss. 361, 46 So. 78; Stern v. Parker, 200 Miss.

27, 27 So. 2d 402; Hendria v. Foote, 205 Miss. 1, 38 So. 2d

111; and State v. Cummings, 206 Miss., 40 So. 2d 587.

The Weeks Act specifically recognized non-interference

with surface enjoyment as the criterion obtained by the

statute. Compare Section 518, Title 16 U.S. C. A., c. 186,

Sec. 9, 36 Stat. 962, as amended c. 145, 37 Stat. 855, wherein

it is said:

‘*Such acquisition by the United States shall in no

case be defeated because of located or defined rights of

way, easements, and reservations, which, from their

nature will, in the opinion of the National Forest Res-

ervation Commission and the Secretary of Agriculture,

in no manner interfere with the use of the lands so

encumbered, for the purposes of sections 480, 500,

513-519, and 521 of this title. * * *%.’’

Thus when conformity hereasto is, then the national pur-

pose has been delimited. Compare Group No. 1 Oil Corp.

v. Bass, 283 U. 8. 279, 75 L. ed. 1032. And as said in Gulf

Refining Co. v. Stanford, 202 Miss. 602, 30 So. 2d 516,

173 A. L. R. 1099, leasing is the common form for develop-

ment and therein the Government has vested as to this oil a

defeasible fee in its lessees. And that whereto alone the

Government will receive is a potential profit from its royalty

whereasto, with deference, quo ad Mississippi’s sovereignty

and her taxing needs, the United States stands just exactly

where South Carolina stood when it engaged in the liquor

business as to the taxing power of the United States.

IV. Under the Weeks Act the United States Has Consented,

If This Be Essential, to Ad Valorem Taxation of Oil

Reservations.

Wilson v. Cook, 327 U.S. 474, 90 L. ed. 793, is persuasive

and its principles intimated, at least impliedly, should be

extended to compel recognition of Mississippi’s sovereignty

as to the underlying oil wherefor the United States did

not pay and whereasto in good conscience if it had treated

all of its citizens alike as we submit it should, it would have

left Kalmia with this oil and not have taken it for $1.35

per acre in the midst of a depression when Kalmia was beset

by large tax payments to Mississippi which it could not

meet, untruthfully, through its agent, leading Kalmia to

believe that it was a condition exacted by the United States

that there be only a ten year mineral reservation. It may

have been that Conarro, who is assumed to have known of

the policy of the National Forest Reservation Commission,

did not intend to mislead but no one has dared to controvert

that he did mislead and the District Court specifically ex-

cluded a positive declaration made by the Government’s

examining attorney to that effect. There is a similarity

between timber, which must remain in place, and oil and

gas which are fugacious with power of transition. The

United States established in Arkansas, with a consent from

Arkansas remarkedly like the consent assumed to be given

by Mississippi, a national forest and having thus done as

to the timber therefrom removed, the State assumed to

impose a tax. Therein it was said, p. 797:

‘‘An Arkansas statute, Act 118 of 1923, * * * im-

poses ‘a privilege or license tax . . . upon each

person . . . engaged in the business of

severing from the soil . . . for commercial pur-

poses natural resources, including . . . timber.’

By Sec. 13,372, as a condition of the license, there is

imposed on the severer an obligation to pay the tax and

consent that the tax ‘shall . . . remain a lien on

each unit of production until paid into the State Treas-

ury.’ Section 13,375 fixes the tax at 7 cents per thou-

sand feet of the timber severed. Section 13,376 pro-

vides that the state ‘shall have a lien upon any and

all natural resources severed from the soil’.’’ (which we

contend, with deference would apply to oil, a natural

resource). ‘‘In Section 13,382 it is provided that ‘the

payment of said privilege taxes shall be required of

the severer . . . actually engaged in the operation

of severing natural resources, whether as owner, lessee,

concessionaire or contractor. . . . The reporting

taxpayer shall collect or withhold out of the proceeds

of the sale of the products severed the proportionate

parts of the total tax due by the respective owners of

such natural resources at the time of severance.’ ’’

In this case, the land was acquired by consent under the

Weeks Act and the United States pursuant to its public

policy as to navigation and timber and as to this timber

so by it owned and grown made a disposition to the person

who thus severed and this business thus done was that

whereasto the tax was, the imposition being, however, in

rem if unpaid against the timber of the United States. The

Court further said in the Wilson case, p. 802:

‘*A further question is whether the lands in the forest

reserve, which were purchased for that purpose by the

United States, are within the territorial taxing juris-

diction of the state. The answer turns on the inter-

pretation of the statute of the United States authorizing

the acquisition of lands, Secs. 7 and 12 of the Act of

March 1, 1911, ¢. 186, 36 Stat. 961, 16 USCA Sees.

480, 516, 5 FCA Title 16, Secs. 480, 516, and of the

state statute of Arkansas authorizing the sale. Pope’s

Digest, Sec. 5646. The meaning of both statutes, as

applied in this case, is a federal question, since upon

their construction depend rights, powers and duties

of the United States. Silas Mason Co. v. Tax Commis-

sion, 302 US 186, 197, 82 L ed 187, 196, 58 S Ct 233, and

cases cited.

‘‘The statute of Arkansas consenting to the purchase

of forest lands by the United States, provided that the

state should ‘retain a concurrent jurisdiction with the

United States in and over lands so acquired . . .’,

to issue and execute ‘civil process in all cases, and such

criminal process as may issue under the authority of

the state. . . .’ It made no express grant or res-

ervation of legislative power over the areas purchased.

Hence the statute cannot be taken as having yielded

or intended to surrender to the Federal Government

the state legislative jurisdiction over the area in ques-

tion, so far as exercise of that jurisdiction is consistent

with federal functions. Any doubt as to the effect of

such a grant by the state in conferring exclusive legis-

lative jurisdiction over the territory which is acquired

by the Federal Government is removed by the provi-

sions of the federal statute.

‘‘Section 12 (Sec. 480, Title 16 U.S.C.A.) of the fed-

eral statute, authorizing the purchase, provided: ‘That

the jurisdiction, both civil and criminal, over persons

upon the lands acquired under this Act shall not be

affected or changed by their permanent reservation

F as national forest lands, except so far as the

punishment of offenses against the United States is

concerned, the intent and meaning of this section being

that the state wherein such land is situated, shall not,

by reason of such reservation and administration, lose

its jurisdiction nor the inhabitants thereof their rights

and privileges as citizens or be absolved from their

duties as citizens of the State.’

“By this enactment Congress in effect has declined

to accept exclusive legislative jurisdiction over forest

reserve lands, and expressly provided that the state

shall not lose its jurisdiction in this respect nor the

inhabitants ‘be absolved from their duties as citizens

of the State’. Compare Silas Mason Co. v. Tax Com-

mission, 302 US 186, 82 L ed, 187, 58 S Ct 233, supra;

Atkinson v. State Tax Commission, 303 US 20, 82 L ed

621, 58 S Ct 419; Collins v. Yosemite Park & C. Co. 304

US 518, 528, 82 L ed 1502, 1509, 58 S Ct 1009; James

Stewart & Co. v. Sadrakula, 309 US 94, 99, 84 L ed

596, 600, 60 S Ct 431, 127 ALR 821.

‘‘Our conclusion, based on the construction of the

interrelated state and federal statutes, is that the state

has territorial jurisdiction to lay the tax upon activities

carried on within the forest reserve purchased by the

United States.

‘*What we have said of the argument that the tax

assessed on plaintiffs is an unconstitutional burden on

the Government, is applicable to the tax assessed for

severance of timber from forest resere lands which,

from the beginning, have been a part of the public

domain. That tax is likewise valid if the state has

legislative jurisdiction over such lands within its

boundaries.

‘‘Upon admission of Arkansas to statehood in 1836

upon an equal footing with the original states, (Act

of June 15, 1836, ¢ 100, 5 Stat 50) the legislative

authority of the state extended over the federally owned

lands within the state, to the same extent as over

similar property held by private owners, save that the

state could enact no law which would conflict with

the powers reserved to the United States by the Con-

stitution. Ft. Leavenworth R. Co. v. Lowe, 114 US

525, 539, 29 L ed 264, 265, 5 S Ct 995; Utah Power & L.

Co. v. United States, 243 US 389, 404, 61 L ed 791, 816,

37 S Ct 387. (Compare United States v. Texas, —

U.S. —, 94 L. ed. 805) Such authority did not pass to

the United States by virtue of the provisions of Ariicle

1, Sec. 8, cl 17, of the Constitution, which authorize it

‘to exercise exclusive Legislation . . . over all Places

purchased by the Consent of the Legislature of the

State in which the Same shall be.’

‘‘Since the United States did not purchase the lands

with the consent of the state, it did not acquire exclusive

jurisdiction wnder the constitutional provision, and

there has been no cession of jurisdiction by the state.

Surplus Trading Co. v. Cook, 281 U. S. 647, 651, 74

L. ed. 1091, 1094, 50 S. Ct. 455; Silas Mason Co. v. Tax

Commission, supra (302 U. S. 210, 82 L. ed. 203, 58

S. Ct. 233). Although Arkansas has, by Sec. 5647,

Pope’s Digest, conferred on Congress power to pass

laws, civil and criminal, for the administration and con-

trol of lands acquired by the United States in Arkansas,

it has ceded exclusive legislative jurisdiction neither

over lands reserved by the Umted States from the

public domain, nor over lands acquired im the state.

Ft. Leavenworth R. Co. v. Lowe, supra (114 U. S. 530,

531, 29 L. ed. 266, 5S. Ct. 995). It follows that the state

has retained its legislative jurisdiction, which it ac-

quired by statehood, over public lands within the state

which have been included within the forest reserve.

‘‘We conclude that the state has legislative jurisdic-

tion over the federal forest reserve lands located within

it, whether they were originally a part of the public

domain of the United States, or were acquired by the

United States by purchase, and that the tax assessed

against plaintiffs is not subject to any constitutional

infirmity, or to any want of tawing jurisdiction of the

state to lay it with respect to transactions on the

federal forest reserve located within the state.’’ (Km-

phasis ours.)

And in the dissenting opinion Mr. Justice Rutledge said,

p. 804:

‘In No. 328 the Court sustains the application of the

Arkansas severance tax to the appellants. In my judg-

ment the cause should be remanded to the state court

for it to determine the applicability of the lien and col-

lection provisions to the United States, or their sever--

ability, and in the light of that determination to ascer-

tain the constitutional validity of the tax as applied to

appellants. Those issues are inescapable on the record

in this case. For until they are determined any decision

here can affect only a tax of uncertain incidence, unless

the Court in sustaining it means to rule, as I think the

—

Arkansas court ruled, that the tax is valid whether or

not the statute’s lien and collection provisions apply to

the United States as owner of the land and the severed

tumber.’’ (Emphasis ours.)

Section 112 of the Constitution was paramount to the

power of the Legislature and the purpose of the Weeks Act

as to surface and timber (United States v. Nebo Oil Co.,

90 F’. Supp. 73), and the specific recognition of state sover-

eignty as to oil reserves must be kept constantly in view.

Authorities infra. As was pointed out in Merrill Eng. Co.

v. Capital Nat. Bank, 192 Miss. 378, 5 So. 2d 666, the oil can

be withdrawn from the earth, is intended thus to be and

when withdrawn the cavern left in no way affects the sur-

face. Of course, the timber may reproduce; under certain

conditions the oil may re-enter under its power of self-

locomotion but the Weeks Act was centered upon the con-

servation of timber as that requisite under the commerce

power whereas as to oil there never has been such a power

in the United States because not within the original purpose

of the Constitution, certainly not within the original pur-

pose of this Act. Compare Wilson v. Cook, 327 U. S. 474,

90 L. ed. 793; United States v. Nebo Oil Co., 90 F. Supp. 73.

This Court was careful to make a determination that,

quo ad the timber operator, and, we submit, in the light of

the dissenting opinion of Mr. Justice Rutledge as to the tax

lien upon the timber of the United States and the collection

of the tax therethrough, the timber belonged to the United

States and was being purchased from the United States, the

party who severed was nevertheless as to the timber subject

to state jurisdiction. This opinion was so thus interpreted

in United States v. Nebo Oil Company, 90 F. Supp. 73,

wherein the United States as owner under the Weeks Act

sought to obtain for itself certain mineral rights and there-

asto in an able opinion was defeated in its contentions and

_—

thereto for that, with deference, properly said, reference

is hereby made.

This Court has approved the Wilson case, supra, in Okla-

homa Tax Com. v. Texas Company, 336 U. 8. 342, 93 L. ed.

721; 8S. R. A. v. Mimmesota, 327 U. 8. 558, 90 L. ed. 851.

Herein, if the Nebo case, supra, be followed, the status

of the underlying oil is a federal question whereasto the

decision here is conclusive. The character of oil and gas

as property is in large measure sui generis. Compare

Rist v. Toole County, — Mont. —, 159 P. 2d 340, 162 A. L. R.

402, and authorities supra. Compare, also, 36 Am. Jur.,

‘‘Mines and Minerals’’, Sec. 23, 35, p. 297, 306; 58 C. J. S.,

‘Mines and Minerals’’, Sec. 134, p. 213; 1 Swmmers Oil and

Gas, 2nd Ed., Sees. 11, 61 and 62; Ohio Oil Co. v. Indiana,

177 U. S. 190, 44 L. ed. 729; and Gulf Refining Co. v. Stone,

197 Miss. 713, 21 So. 2d 19. So that, if there be any way in

which this Court can sustain the validity of Mississippi’s

statutes by properly interpreting the character of property

in oil and gas, we submit that this should be so done, espe-

cially is this so because by Sec. 486, Title 16 U. S. C. A.,

c. 105, Sec. 2, as amended Feb. 28, 1925, ¢. 375, 43 Stat. 1090:

«“* * * All property, rights, easements, and bene-

fits authorized by this section to be retained by or 12-

served to owners of lands conveyed to the United States

shall be subject to the tax laws of the States where such

lands are located.’’

Strictly speaking, this declaration might be limited to ex-

changes authorized under Section 485, but, quo ad the taxing

power, the reservation of the oil is precisely the same

whether it arose under an exchange or under another form

of conveyance. In short, the form of conveyance is, with

deference, immaterial, the substance of the conveyance con-

trolling, and when Congress specifically provided that these

reservations should be in accordance with the law of the

state, this is valid. Compare United States v. Gerlach Live

Stock Co., — U. 8. —, 94 L. ed. 876, 878:

‘‘On Wait oi Certiorari to the United States Court

of Claims to review awards of compensation for depri-

vation of water rights along the San Joaquin River in

California, caused by the construction of the Friant

Dam and its dependent irrigation system.

‘We cannot disagree with claimants’ contention that

in undertaking these Friant projects and implementing

the work as carried forward by the Reclamation

Bureau, Congress proceeded on the basis of full recog-

nition of water rights having valid existence under

state law. By its command that the provisions of the

reclamation law should govern the construction, opera-

tions, and maintenance of the several construction

projects, Congress directed the Secretary of the In-

terior to proceed in conformity with state laws, giving

full recognition to every right vested under these laws.

Cf. Nebraska v. Wyoming, 295 U. S. 40, 43, 79 L. ed.

1289, 1291, 55 S. Ct. 568; California Oregon Power Co.

v. Beaver Portland Cement Co., 295 U. S. 142, 164, 79

L. ed. 1356, 1364, 55 S. Ct. 725; Nebraska v. Wyoming,

325 U. S. 589, 614, 89 L. ed. 1815, 1829, 1830, 65 S. Ct.

1332; Silas Mason Co. v. Tax Com. 302 U. S. 186, 82

L. ed. 187, 58 S. Ct. 233. * * *.’? (Emphasis ours.)

Compare Capital Greyhound Line v. Brice, — U. 8S. —, 94

L. ed. 733; Leisy v. Hardin, 135 U. S. 100, 34 L. ed. 128;

Re Rahrer (Wilkerson v. Rahrer), 140 U. S. 545, 35 L. ed.

572; Louisville € Nashville R. Co. v. F. W. Cook Brewing

Co., 223 U.S. 70, 56 L. ed. 355; Kentucky Whip € Collar Co.

v. I. C. R. Co., 299 U. 8. 334, 81 L. ed. 270, 276, wherein it is

said:

‘*By the Wilson Act of August 8, 1890, intoxicating

liquors transported into any State were subjected upon

arrival to the operation of state laws to the same extent

—

as though they had been produced within the State,

although still in the original packages. * * *.’’

Furthermore, when there is the ownership of the underly-

ing oil, Congress specifically provided as to damages thus,

43 Stat. 1090, Title 16 U. S. C. A., Sec. 486:

‘«* * * where mineral reservations are made in

lands conveyed by the United States it shall be so stipu-

lated in the patents, and that any person who acquires

the right to mine and remove the reserved deposits

may enter and occupy so much of the surface as may be

required for all purposes incident to the mining and

removal of the minerals therefrom, and may mine and

remove such minerals upon payment to the owner of the

surface for damages caused to the land and improve-

ments thereon. * * *,.’’

Note further, 30 Stat. 36, Title 16 U. S. C. A., Sec. 481, which

provides:

‘¢ All waters within the boundaries of national forests

may be used for domestic, mining, milling, or irrigation

purposes, under the laws of the State wherein such

national forests are situated, or under the laws of the

United States and the rules and regulations established

thereunder.’’

On land whereasto the right of entry and removal has

determined, the general rule is that thereby there is not a

forfeiture of the timber but that removal may be had, com-

pensating the surface owner for all damages done. Com-

pare Irons v. Webb, 41 N. J. L. 204, and other authorities

supra. See, also, Ingram-Day Lbr. Co. v. Clark, 43 Miss.

813.

So that under the Weeks Act as thus interpreted by this

Court, the jurisdiction of Mississippi under its sovereign

power as to taxation has not, we submit, in any way deter-

mined, and it was not the intention of Congress that it should

be divested but that, quo ad oil, this sovereignty should per-

sist. As to reservation of oil, at least, we have the express

as well as the implied obligation. Compare West v. Okla-

homa Tax Com., 334 U. S. 723, 92 L. ed. 1680, 1682, wherein

it is said:

‘*TIn this setting, refinements of title are immaterial.

Whether legal title to the properties is in the United

States or in the decedent and his heirs is of no conse-

quence to taxability of the transfer.’’

And that herein at issue is the taxability of oil under lands

wherein thereasto a reservation has been made and in a

broader sense, but not necessarily herein involved, under

lands wherein there is not a reservation but an absolute

ownership and we, with deference, submit that as to the

consent of the United States to the territorial sovereignty

of the forty-one states wherein there are these national

forests their laws as to oil in reservations are to be oper-

ative. Oil was the great issue in Umited States v. California,

332 U. S. 19, 91 L. ed. 1889; United States v. Louisiana,

— U.S. —, 94 L. ed. 800; United States v. Texas, — U. S.

—, 94 L. ed. 805; and state taxation of federal rights therein

have been in issue since M’Culloch v. Maryland, 4 Wheat

(U. S.) 316, 4 L. ed. 579, and, with deference, this Court

has not drawn such a line as that this vital issue between

federal and state sovereignty can be with absolute certainty

determined unless this Court will herein do the needful.

Compare National Labor Relations Board v. Mewia Textile

Mills, Inc., — U. 8. —, 94 L. ed. 757, comments of Mr.

Justice Frankfurter; and as to this issue which is upon the

constitutional level we, with deference, submit the Court of

Appeals has not vouchsafed such a decision as will dis-

charge this Court from its paramount obligation to make

hereasto an outstanding precedent. The same necessity

as has compelled certiorari in the Wilson case, supra, and

those that follow it, is inherently operative here and im-

peratively demands solution as to fundamental factors

solely here solvable nationally. Remember, the United

States had only a possibility of reverter when this tax sale

was of the oil and under sovereign state power, Mississippi

possessed, with the nation’s consent and, also, because it

had failed to make a cession, the right to compel property

within its boundaries to pay for its creation—its protection.

In the New Brunswick case, supra, the acquisition was

under an exclusive power and had to do with that wherein

the United States had an absolute right paramount to

state sovereignty, the government under Mississippi law,

if applicable, being trustee of the property for the pur-

chaser and the purchaser being trustee of the purchase

price for the government. Compare J. M. Griffin Co. v.

Jernigan, 170 Miss. 3438, 154 So. 342.

With this absolute right in the government, both jus in

re and jus ad rem, the state could not divest but here

Mississippi possessing never forewent and in addition to

the extent of reservations in oil, the United States con-

sented specifically that State laws as to taxation should

admeasure and remain.and, with deference, we ask that

here that be done as declared proper by Mr. Justice Jack-

son in Federal Power Com. v. East Ohio Gas Co., — U.S.

—, 94 L. ed. 213, 220.

V. Mississippi’s Sale of Minerals, Including Oil, to Pay for

Defaulted Ad Valorem Non-Discriminatory Tax,

Valid.

Compare Minor’s Law of Tax Titles, page 2, wherein it

is said:

‘‘The forfeiture or sale of land for unpaid taxes was

unknown to the common law of England, and does not

seem to have been recognized, generally at least, in

this country during the Colonial period. Virginia was

probably the first to adopt the plan, such a statute

being passed by her legislature in 1790.

‘*At first the policy in Virginia was to forfeit the

delinquent land absolutely to the Commonwealth, upon

the failure to pay the taxes, and such is still the policy

of some of the states. Of the right of the state gov-

ernments to declare lands forfeited to the state upon

the failure to pay taxes assessed thereon, there has never

been any serious question. Every owner holds his

estate upon the implied condition that he will furnish

a list of his taxable property when required by law,

and premptly pay his share of the common burdens

assessed against the entire community; and if he

omits to comply with the condition, the paramount au-

thority of the state, which is entitled to enter for the

breach of this condition, comes in and declares the

estate forfeited for breach of the condition.

‘*But the principle which gives the state—the parens

patriae—the right to impose such an implied condition

upon the tenure of property, denies it to the federal

government on the one hand and to county or city gov-

ernments on the other. * * *.’’

Compare Griffin v. Dogan & Martin, 48 Miss. 11, but note

Griffin v. Mixon, 38 Miss. 424. See, also, State v. Woodroof,

— Ala. —, 46 So. 2d 553, 558, wherein the Alabama court

held a specific lien upon the specific property paramount

to the general lien imposed by the United States under

Sec. 3466, (31 U. 8S. C. A., Sec. 191), distinguishing Spokane

County v. United States, 279 U. S. 80, 73 L. ed. 621; People

of State of New York v. Maclay, 288 U. S. 290, 77 L. ed.

754; United States v. State of Texas, 314 U. S. 480, 86

L. ed. 356; United States v. Waddill, Holland ¢& Flinn,

323 U. S. 353, 89 L. ed. 294; and People of State of Illinois

v. Campbell, 329 U. S. 362, 91 L. ed. 348. Compare Hendria

v. Foote, 205 Miss. 1, 38 So. 2d 111; Bailey v. Federal Land

Bank, 206 Miss. 354, 40 So. 24 173; State v. Cummings, 206

Miss. 630, 40 So. 2d 587.

(a) The sale was made September 21, 1942, and under

Section 9935, Mississippi Code of 1942, among other

things, it is provided:

‘¢* * * All such lists shall vest in the State or in the

individual purchaser thereof, a perfect title to the land

sold for taxes, but without the right of possession for

the period of and subject to the right of redemption;

* * *.? (Emphasis ours.)

The law is the same in Mississippi as it was in New Jersey.

Compare New Brunswick v. United States, 276 U.S. 547, 72

L. ed. 693; Jackson v. Ashley, 189 Miss. 818, 199 So. 91;

Merrill Eng. Co. v. Capital Nat. Bank, 192 Miss. 378, 5 So.

2d 666.

(b) By Section 9936, Mississippi Code of 1942, it was

also provided:

‘“* * * The said lists shall vest in the state or

the individual purchaser thereof a perfect title to the

land sold for taxes, but without right of possession and

subject to the right of redemption; * * *.’’

Then after the expiration of the redemption period of two

years, the clerk delivered a deed in accordance with Section

9958, Mississippi Code of 1942, whose provisions are:

‘«* * * such conveyance shall vest in the purchaser

a perfect title with the immediate right of possession

to the land sold for taxes; * * *.’’

Compare Seward v. Dogan, 198 Miss. 419, 21 So. 2d 292;

Murphey v. Seward, 145 Miss. 713, 110 So. 790. Minerals

are sold precisely as land. Mississippi Code of 1942, See.

9770.

Judge Mize specifically found that this tax sale to Hen-

drix was valid, but was invalidated as to the oil in virtue

of the sovereignty of the United States, relying therefor

exclusively upon New Brunswick v. United States, 276

U. S. 547, 72 L. ed. 693, holding that the title to the oil

vested in the United States under the reservation as at

December 24, 1943, because Kalmia had not during the

preceding five-year period been found to have employed

to commercial advantage, Tr. 410. So that if Kalmia had

operated to commercial advantage during this five-year

period there would have been under this deed an extension

to December 24, 1948, and thereafter possibly in perpetuity

the United States having the substantial equivalent of a

possibility of acquisition—the converse of a possibility of

reverter since no title whatsoever at the date of the deed

vested in the Government and none could so vest at the

pleasure of Kalmia. That Kalmia thus did operate to com-

mercial advantage, we have, with deference, demonstrated

supra and there is following the finding of Judge Mize to be

considered this further important factor. As at December

24, 1943, the terms of the deed require, Tr. 409:

«* * * provided that if at the termination of the

said 10-year period of reservation it is found that such

oil, gas and other valuable mineral rights and interests

are being operated or have been operated at any

time during the preceding five years to commercial

advantage, * * *.’’

There is hereunder initially an absolute reservation of all

minerals. That at this date, the declaration of the deed

is that if ‘‘it is found’’ there shall then be an extension

in perpetuity, but the Government in drafting this deed

did not say who was to find or how the finding was to be

evidenced, but left in suspension the matter by simply

providing if ‘‘it is found’’. Now, this deed is remarkable

in that it assumes to provide at its conclusion for the

vestiture of the minerals in the United States thus, Tr. 409:

‘¢ «That at the termination of the 10-year period, if

not extended, or at the termination of the extended pe-

oo“

riod in case the operation has been carried on for a

number of causes under (carried on for the number

of days and under, Tr. 25) conditions stated, the right

to mine and remove oil, gas and other valuable miner-

als shall terminate and complete fee in the land become

vested in the United States’.’’

New Brunswick case, supra, that all property belonging

to Kalmia remained subordinate to state taxing sovereignty,

but contended that upon December 24, 1943, per se, the title

was divested from Kalmia and vested in the United States.

Assuming this reasoning to be accurate as to that whereto

the property was subject yet herein note

1. That reserved was ‘‘all minerals’’—oil—with the

absolute right at pleasure to remove, presumptively through

leases to those accustomed to operating oil properties.

2. The provision in this deed was, Tr. 23:

‘*Provided; Further, that the right or rights to mine

and reserve oil, gas and other valuable minerals when

extended shall be limited to an area of twenty-five acres

of land around each well or mine producing, and each

well or mine being drilled or developed at time of first

extension, to-wit: December 24, 1943.’

The court held that this provision as to the twenty-five acres

was void for uncertainty. Compare Tr. 397:

‘<3. The Court concludes, as a matter of law, that the

provision as follows: ‘Provided further, that the right

or rights to mine and reserve oil and gas and other

valuable minerals, when extended, shall be limited to

twenty-five acres of land around each well or mine pro-

ducing and each well or mine being drilled or developed

at the time of the first extension, to-wit: December 24,

1943’ is void in so undertaking to limit or describe such

area of acreage because of the vagueness of the de-

poription, *° °°."

Compare Jones v. Mount, 30 Ind. App. 59, 63 N. E. 798;

Norris v. Fleming, 62 Idaho 381, 112 P. 2d 482; Parsons &

Sweeney Oil Co. v. McCormic, 68 W. Va. 604, 70 S. E. 371;

First Savings Bank & Trust Co. of Albuquerque v. Elgin, 29

N. M. 592, 225 P. 582; Indianapolis Natural Gas Co. v.

Spaugh, 17 Ind. App. 683, 46 N. E. 691; Ramage v. Wilson,

37 Ind. App. 532, 77 N. E. 368, 88 N. E. 863; Monaghan v.

Mount, 36 Ind. App. 188, 73 N. E. 579; Nunnery v. Ford, 92

Miss. 263, 45 So. 722; McAllister v. Honea, 71 Miss. 256, 14

So. 264; Jefferson v. Walker, 199 Miss. 705, 26 So. 2d 239.

And under Mississippi law if this be void, it would leave the

reservation in effect. Compare Ates v. Ates, 189 Miss. 226,

196 So. 243.

(d) Whether or not the court below should have accorded

to this provision any effect was with all a judicial question

whereasto judicial recourse was requisite.

(e) Herein, persons of unquestioned veracity, Tr. 267,

et seq., swore that, quo ad this deed, there was a material

misrepresentation of fact whereby invalidation occurred.

Compare Brown v. Ohman, — Miss. —, 42 So. 2d 209, 43 So.

2d 727; Derry v. Peek, House of Lords, 14 App. Cas. 337.

It is true that the representative, Conarro, was by the Dis-

trict Court held to have contradicted this testimony which,

with deference, he did not, but as stated in the Govern-

ment’s answers to interrogatories, this fraud was not 2 rele-

vant issue, Tr. 90:

‘c* * * Plaintiff further shows thai the allegations

of misrepresentation, made by defendant, deal with a

matter of law upon which defendant would not have

been entitled to rely even if such a representation had

been made * * *,’’

And furthermore petitioners offered to prove by competent

evidence that Montgomery, the government’s examining at-

torney, specifically made this statement as to the inability to

limit otherwise than was done by this deed. To this proof

the United States objected and its objection was sustained,

Tr. 385:

“‘Q. At the time that it was signed, please state

whether or not there was a representation made to you

by Mr. Montgomery—as near as you can give the Court,

give it to him in his own words.

‘*A. Well, you know, we had discussed thi: with him

about the mineral mix-up. He said, you have got to

clear it, so we cleared it. Just like Mr. Conarro said,

we have had many discussions, but it all boils down to

this—he said 10 years is the limit.

‘‘The Court:

‘‘T will adhere to my ruling on the objection and will

exclude that from consideration as to what was said by

Mr. Montgomery.’’

So that while it is true that the District Judge assumed to

find that petitioners had not met the burden of proof as to

fraud he at the same time held that the petitioners could not

make this proof because their evidence thereasto was incom-

petent and we thus have Kalmia, according to the District

Judge, obligated to prove fraud clearly and convincingly

(Brown v. Ohman, — Miss. —, 43 So. 2d 209) but at the same

time the District Judge holding that tender of evidence spe-

cifically so thus showing was not admissible. So herein, that

at issue is not a proper admeasurement of petitioner’s evi-

dence but the wrongful exclusion by the District Judge of

that competent evidence which was in and of itself adequate

to prove the fraud whereon petitioners relied but which the

District Judge assumed to hold could not be done as was said

in Finding No. 9, Tr. 423:

**9. The Court concludes as a matter of law that, even

if proved, the misrepresentation which the Govern-

ment’s agent, Mr. Conarro, is charged with making,

would not serve as a basis for voiding any part of the

deeds to the United States because it dealt with a matter

of law with which Kalmia was charged with notice and

Mr. Conarro was not authorized to make any repre-

sentations as to matters of law.’’

Fraud vitiates all by it touched, and when the attorney for

the United States sought thus to declare that there could be

no other reservation further than the ten years and there

was, quo ad this oil, the uniform rulings of the National

Forest Reservation Commission, delineated in United States

v. Nebo Oil Company, 90 F. Supp. 73, we have a right, in con-

sidering the validity of this tax title, to assume the fraud

existent for the United States attorney was certainly such a

person assuming to make such a representation as that those

ignorant of national policy could thereon rely, and when the

District Judge assumes to determine this case contra as to

the quantum of proof requisite when hé excluded the most

potent evidence directly supporting, we find such, with

deference, a case as though affirmed by the Court of Appeals

renders rectification here requisite. The District Judge con-

ceded the potency of petitioners’ evidence, including declara-

tions uncontradicted of Senator Harrison and other credible

witnesses and in addition the exclusion of competent evi-

dence directly supportive of that said by our distinguished

Senator, and if as, with deference, was the case, these declar-"

ations of Mr. Montgomery and others which could have been

offered had the District Judge not excluded, the burden

would have been met and in virtue of this wrongful exclusion

we insist it must be herein held that there was that fraud

which would have thus invalidated.

But note Staten Island Hygeia Ice & Cold Storage Co. v.

United States, CCA 2nd, 85 Fed. 2d 68, 71:

«“* * * But in the case at bar the law was no longer

in doubt; the Supreme Court had settled that collection

of the asserted claims could not be made, and official

information of that decision had been given to in-

ternal revenue officers by the January, 1920, issue of

Treasury Decisions; hence the deputy collector was

acting contrary to his duty in demanding payment.

Under such circumstances, to allow the government to

insist upon a compromise induced by its agent’s misrep-

resentation of its rights against a taxpayer, and thereby

to retain the prior payment which it was legally bound

to refund, would be highly inequitable and is not sanc-

tioned by the authorities. * * * Between private

parties it seems to be well established that equitable

relief may be had where a mistake as to the plaintiff’s

legal rights is induced by misrepresentations, even

though innocently made, if it be reasonable for the plain-

tiff to rely upon the presumably greater knowledge of

the defendant. * * * If the deputy collector acted

beyond his authority in demanding payment of an out-

lawed tax and in soliciting the offer to compromise, his

agency was nevertheless ratified when the government

took advantage of the offer he had procured. There is

nothing in the nature of sovereignty or in the recognized

prerogatives of the sovereign which would allow the

government to take and keep a right without the accom-

panying burden that modifies it, namely, in this case,

voidability for misrepresentation.’’ (Emphasis ours.)

See, also, Bull v. United States, 295 U.S. 247, 79 L. Ed. 1421;

Shooters Island Shipyard Co. v. Standard Shipbuilding

Corp., 293 Fed. 706, CCA 3rd; Bradburn v. McIntosh, 159

Fed. 2d 935, CCA 10th; United States v. Beebee, 17 Fed. 36;

Gooch Milling & Eleva. Co. v. Commissioner of Internal

Revenue, 133 Fed. 2d 131, CCA 8th; United States v. The

State National Bank of Boston, 96 U. S. 30, 24 L. Ed. 637.

If this fraud which we submit was existent, by reason of

the exclusion by the District Court of competent proof there-

asto on the ground that Kalmia could not rely thereon, we

find the Fifth Circuit in direct conflict with (a) this Court,

(b) the Second Circuit and other Circuits, as well as (c) the

State of Mississippi, and (d) the general law; and when that

estate thus infected was sold for taxes with an impossibility

of hereasto suing the United States, the effect under this

deed was to convert this condition, if it so were originally

and were valid, into a covenant for the breach whereof to the

extent essential compensation might be had, especially under

the ruling of the National Forest Reservation Commission.

(f) Under the war power, on December 28, 1941, Donald

M. Nelson, Director of priorities, issued a regulation, Con-

servation Order M-68, whereunder as to oil development

and the critical material, steel, therefor requisite must

needs be regulated, and among other provisions therein

contained was found:

‘*(7) To any case where Material is to be used by

An Operator to drill or complete any well in any dis-

covered or undiscovered oil field other than a Conden-

sate Field, where such well conforms to a uniform well-

spacing pattern of not more than one single well to each

40 surface acres.’’

And, further, in Petroleum Administrative Order No. 11

as amended January 4, 1944, it was further expressly pro-

vided:

‘*(ii) the well must be located on a drilling unit con-

sisting of at least 40 contiguous surface acres upon

which no other drilling or producible well is lo-

neg ae

These actions thus taken by the United States were by it

intended to be effectual as to the Kalmia deed and the gen-

eral welfare then rendered it requisite that there should

be not a twenty-five acre area, but a forty acre area, thus

fundamentally changing pursuant to the war power that

which precedently had assumed to be done by the Depart-

ment of Agriculture, and that now at:issue is, may the

United States, having thus assumed so to do, insist. upon,

as against Kalmia and the state’s .overeign taxing power,

that which under the war power was made requisite to be

done by every person who thus sought to drill. In short,

this section as to ‘‘right or rights’’ was thus, with defer-

ence, written out of this deed if it ever were validly therein

so that as at the alleged date of expiration on December 24,

1943, it had been therefrom completely deleted snd thereto

as at that date no validity whatsoever, quo ad oil, could

be to it vouchsafed. The United States, under its war

power, could have thus foregone, had it elected, and we,

with deference, submit that this act thus making effective

for the national defense these petroleum deposits, drew out

of this deed that clause whereon the Department of Agri-

culture seeks to stand, protesting as we do it had no author-

ity whatsoever therein to place the provision initially.

Compare Chapman v. Sheridan Wyoming Coal Co., 338 U.S.

621, 94 L. ed. 307. This was a further judicial question

whereasto petitioners were entitled to a judicial determina-

tion under the Due Process Clause of the Fifth Amendment.

Compare Mulane v. Central Hanover Bank & Trust Co.,

— U.S. —, 94 L. ed. 578, 583, quoted supra. A judicial

hearing is essential to due process. Compare Ewing v.

Mytinger & Casselberry, Inc., — U.S. —, 94 L. ed. 776, 779,

wherein it is said:

‘«“* * * We have repeatedly held that no hearing

at the preliminary stage is required by due process so

long as the requisite hearing is held before the final ad-

ministrative order becomes effective. See Lichter v.

United States, 334 U. S. 742, 92 L. ed. 1694, 68 S. Ct.

1294; Inland Empire Dist. Council v. Millis, 325 U. 8S.

697, 89 L. ed. 1877, 65 S. Ct. 1316; Opp Cotton Mills v.

Administrator of Wage & Hour Division, 312 U. S. 126,

85 L. ed. 624, 61 S. Ct. 524.’’

This Court confines its determination of constitutional

questions to the precise factors integrated. Compare

Sweatt v. Painter, — U. 8. —, 94 L. ed. 783; Mauer v. Hamil-

ton, 309 U. 8S. 598, 84 L. ed. 969, 185 A. L. R. 1347. And

herein, therefore, will not proceed further than to recon-

cile the conflict, if existent, between national and state

sovereignty.

VI. The Legislature of Mississippi Prohibited from Con-

senting That the United States Might Acquire the Oil

and, Quo Ad the Oil, the Assumed Consent of the

Legislature a Nullity.

1. As shown by Appendix ‘‘F’”’ hereto, the letter of the

Attorney General, under the Mississippi Constitution, there

was no power to consent to this oil acquisition. Compare

Section 4 of the Constitution:

‘‘The legislature shall have power to consent to the

acquisition of additional territory by the state, * * *.’’

2. Section 17 of the Constitution provides:

‘‘Private property shall not be taken or damaged

for public use, except on due compensation being first

made to the owner or owners thereof, in a manner to

be prescribed by law; and whenever an attempt is made

to take private property for a use alleged to be pub-

lic, the question whether the contemplated use be pub-

lic shall be a judicial question, and, as such, deter-

mined without regard to legislative assertion that the

use is public.’’

Presumptively under Mississippi’s Constitution only that

property requisite for the public use may be condemned,

be it easement or be it fee. Minerals in Mississippi are

separate from the soil and the timber, Butterfield Lbr. Co.

v. Guy, 92 Miss. 361, 46 So. 78, and under this section the

limitation would exclude the minerals. Compare Nicholson

v. Board of Mississippi Levee Com., 203 Miss. 71, 33 So. 2d

604; Whitworth v. Mississippi State Higtway Com., 203

Miss. 94, 33 So. 2d 612, which decisions the Federal court

declined to follow or apply.

3. Section 33 of the Constitution provides:

‘‘The legislative power of this state shall be vested

in a legislature which shall consist of a senate and a

house of representatives.’’

Compare Alcorn v. Hamer, 38 Miss. 652, wherein it is de-

clared, p. 749:

‘‘The legislative power, to whatever subjects it may

be applied, and whatever may be its extent, is vested

exclusively in the Senate and House of Representa-

tives, by the people, in whom it resides. They have,

by the highest and most solemn of compacts, the Con-

stitution, voluntarily relinquished their right to exer-

cise it. It can only be reclaimed by an abolition, or

an amendment of the Constitution, and the people are

the only power competent to do either. To allow the

legislature to associate with them in the exercise of

the legislative function another tribunal, or to cast

back upon the people their delegated powers, would

be tantamount to a subversion of the Constitution, by

changing the distribution of the powers of the govern-

ment without the consent of the authority by which it

was ordained. The proposition, that the legislature

can surrender any portion of the authority with which

it is vested, or authorize its exercise by any other body,

or by the whole people of the State, is alike repugnart

to the spirit and positive provisions of the Constitu-

tion. It is opposed to the express provisions of the

Constitution, for the delegation of the legislative power

to the Senate and House of Representatives, is declared

to be exclusive of the other departments, and is neces-

sarily exclusive of every other person or body. * * *.’’

‘Compare Panama Refining Co. v. Ryan, 293 U. 8. 388, 79

L. ed. 446.

4. Section 84 of the Constitution provides:

‘‘The legislature shall enact laws to limit, restrict,

or prevent the acquiring and holding of land in this

state by non-resident aliens, and may limit or restrict

- the acquiring or holding of lands by corporations.’’

See Appendix ‘‘F’’, wherein the Attorney General placed

the United States as one covered hereby.

5. Section 112 of the Constitution, quoted supra and

here integrated by reference. Although hereunder, exemp-

tions may be created, commutation may not be, all property

being necessarily taxed ad valorem and the legislature being

without power to provide contra. Under Mississippi Con-

stitution of 1869 it was possible to impose a privilege tax

‘¢in lieu of all other taxes county and municipal’’, compare

Vicksburg Bank v. Worrell, 67 Miss. 47, 7 So. 219, but under

the Constitution of 1890 this section was integrated to eradi-

cate this practice and so did. Compare Adams v. Missis-

sippi State Bank, 75 Miss. 701, 23 So. 395; Adams v. Y. €

M. V. R. Co., 77 Miss. 194, 24 So. 200; Bank of Oxford v.

Adams, 78 Miss. 532, 29 So. 402. Compare, also, the dis-

senting opinion of Chief Justicé Smith in Gulf Refining Co.

v. Stone, 197 Miss. 713, 21 So. 2d 19, 24, wherein it was said:

‘‘Tt is manifest from these two sections of the statute

that the privilege tax levied by section 2 thereof on

persons producing oil for profit, or commercial pur-

poses, was adopted by the legislature as a substitute

for the ad valorem tax on oil in and produced from

land. Such a tax violates section 112 of the Constitu-

tion, and is void. Adams v. Mississippi State Bank,

75 Miss. 701, 23 So. 395; Adams v. Bank of Oxford, 78

Miss. 532, 29 So. 402; Thompson v. Kreutzer, 112 Miss.

165, 72 So. 891; Chicago, etc., R. C. v. Robertson, 122

Miss. 417, 84 So. 449; Reed Bros., Inc. v. Board of Super-

visors, 126 Miss. 162, 88 So. 504.’’

This expression of the distinguished Chief Justice ac-

curately expressed the interpretation still applicable to

Section 112 and under it the United States could not under-

take to return any commuted realization for the State legis-

lature could not thereto validly agree. Note that the coun-

ties may not be deprived of the right thus to tax.

See, also, Section 500, Title 16 U.S.C.A., 36 Stat. 963, as

amended, 58 Stat. 737, whereunder apparently ex gratia

and not ea debito, Congress has assumed to donate 25%

of all moneys received during any fiscal year from each

national forest, admeasuring the same thus:

‘«* * * Tn sales of logs, ties, poles, posts, cordwood,

pulpwood, and other forest products the amounts made

available for schools and roads by this section shall be

based upon the stumpage value of the timber.’’

which may well exclude bonus paid for potential mineral

production, it being the apparent intention of Congress to

limit the payment by that produced in the forest not that

produced from the mines. Compare King County, Wash.

v. Seattle School Dist. No. 1, 263 U.S. 361, 68 L. ed. 339.

Hereasto under Mississippi’s Constitution this proposed

commutation, if inclusive of minerals, contravenes. With

teference, the United States should have begun this action

in the State court and therein had determined all of these

state constitutional questions with a review in this Court

and by reason of the absence of the major oil companies

this course is still, with deference, suggested. Compare

Spector Motor Service v. McLaughlin, 323 U.S. 101, 89

L. ed. 101; approved in American Federation of Labor v.

J. Tom Watson, 327 U.S. 582, 589, 90 L. ed. 873, 877; Stain-

back v. Mo Hock Ke Lok Po, 336 U.S. 368, 383, 93 L. ed.

741, 752; Federal Power Com. v. Interstate Natural Gas

Co., 336 U.S. 577, 583, 93 L. ed. 895, 902; and Propper v.

Clark, 337 U.S. 472, 489, 93 L. ed. 1480, 1494.

6. Section 170 of the Constitution provides:

‘*Kach county shall be divided into five districts, a

resident freeholder of each district shall be selected,

in the manner prescribed by law, and the five so chosen

shall constitute the board of supervisors of the county,

a majority of whom may transact business. The board

of supervisors shall have full jurisdiction over roads,

ferries, and bridges, * * *.’? (Emphasis ours.)

Hereunder, ‘‘full jurisdiction’? was vested in the super-

visors over the roads in the several counties. Uuder the

order assumed to be made by the Forestry Commission,

Tr. 156, it was sought to transfer to the United States juris-

diction over these roads. This act of the Legislature as-

sumed to abrogate the Constitution. This power might be

regulated, compare King v. City of Louisville, — Miss. —,

42 So. 2d 813, but not divested, and the supervisors are a

part of the judicial department, Haley v. State, 108 Miss.

899, 67 So. 498, and an act of the legislature assuming to

transfer any part of this ‘‘full jurisdiction’’ is unconstitu-

tional. Compare Board of Supervisors of Holmes County

v. Black Creek Drainage Dist., 99 Miss. 739, 55 So. 963, 964;

Salter v. Bolivar County, 111 Miss. 867, 72 So. 700; Ala-

bama & V. R. Co. v. Graham, 171 Miss. 695, 157 So. 241;

State ex rel. Knox v. Grenada County, 141 Miss. 701, 105

So. 541; Jefferson County v. Arrighi, 54 Miss. 668; Paxton

v. Baum, 59 Miss. 531; Seal v. Donnelly, 60 Miss. 658; Quit-

man County v. Self, 156 Miss. 273, 125 So. 828. The pro-

posed coordination as to roads, compare Sec. 501, 16

U.S.C.A., as amended, 58 Stat. 737, contravenes. United

States may not be thus associated. Compare Alcorn v.

Hamer, 38 Miss. 652.

7. Section 182 of the Constitution provides:

‘The power to tax corporations and their property

shall never be surrendered or abridged by any con-

tract or grant to which the state or any political

subdivision thereof may be a party, * * *.’’

As to these minerals whereas to the United States has no

constitutional power of acquisition conferred by consent

from the state, if that were possible, it was the constitu-

tional mandate that this property should remain absolutely

subject to taxation. Compare Gully v. Wilmut Gas & Ou

Co., 174 Miss. 794, 165 So. 620. And the United States is

a corporation within this prohibition. See Appendix ‘‘F’’,

Attorney General’s opinion.

8. Section 190 of the Constitution provides:

‘The exercise of the right of eminent domain shall-

never be abridged, or so construed as to prevent the

legislature from taking the property and franchises of

incorporated companies, and subjecting them to public

use; and the exercise of the police powers of the state

shall never be abridged, or so construed as to permit

corporations to conduct their business in such manner

as to infringe upon the rights of individuals or general

well-being of the state.’’

Quo ad the unauthorized acquisition, the Federal govern-

ment occupies this position, thus showing the inability of

the legislature to assume to surrender the minerals.

Property thus held by the United States could not be con-

demned though the local state welfare imperatively de-

manded if the minerals were made immune by the legisla-

ture. The United States has not consented to be sued.

9. Section 227 of the Constitution provides:

‘*A levee system shall be maintained in the state as

provided in this article.’’

10. And by Section 232 of the Constitution it was ex-

pressly provided :

‘“The commissioners of said levee districts shal] have

supervision of. the erection, repair, and maintenance

of the levees in their respective districts, and shall

have power to cede all their rights of way and levees

and the maintenance, management and control thereof

to the government of the United States.’’

So that when it was intended by the Constitution that the

United States should become invested with any specific

authorization, this Constitution was at pains expressly

therefor to specifically provide. This provision authorizing

this cession—the United States having power under the

Commerce Clause hereasto—therefore, presents, we sub-

mit, the sole condition whereunder Mississippi might

abdicate in favor of the United States, but it will be noted

that when the levee board condemned it did not take the

minerals. Compare Section 233 of the Constitution;

Nicholson v. Board of Mississippi Levee Com., 203 Miss. 71,

33 So. 2d 604; Whitworth v. Miss. State Highway Com.,

203 Miss. 94, 33 So. 2d 612.

11. Compare Section 236 of the Constitution under which

there is a mandatory requirement of taxation upon each

and every acre wherefrom the legislature may not escape

by surrendering to the Government.

12. Section 237 of the Constitution provides:

“‘The legislature shall have full power to provide

such system of taxation for said levee districts as it

shall, from time to time, deem wise and proper.”’

Compare Alcorn v. Hamer, 38 Miss. 652.

13. Compare Sections 259 and 260 of the Constitution,

whereunder the legislative power as to creation of new

counties is prescribed and a prohibition against reducing

the area of any county to less than four hundred square

miles. The connotation is that each acre should be appro-

priately dealt with from a tax viewpoint, Portwood v.

Montgomery County, 52 Miss. 523, and if the government

took title to half of a county thereby destroying the local

taxing power and the local instrumentalities of govern-

ment (compare Appendix ‘‘F’’, Attorney General’s

opinion, showing how this system displaces state obliga-

tions), such would, with deference, contravene the purpose,

if not the letter, of these two sections, both of which

strongly suggest that the legislature has no power to

authorize an abdication or the integration of a plan other

than that established by this Constitution, especially inso-

far as taxation is concerned which must be ‘‘uniform and

equal throughout the state’’, Section 112.

14. See, also, Section 271 of the Constitution, under

which the legislature may consolidate counties upon a vote.

These sections, with deference, as construed by the

learned Attorney General, render as to these minerals it

unconstitutional to do that assumed to be done. It might

be that the Act itself could be sustained as constitutional

while this specific assertion of power to acquire the minerals

alone should be stricken down. Compare Kennington v.

Palmer, 255 U.S. 100, 65 L. ed. 528, wherein the interpreta-

tion placed upon the Lever Law was specifically enjoined

though in that case the act itself was also condemned.

So far, therefore, as the Legislature of Mississippi was

concerned, it could not surrender state sovereignty as to

taxation of minerals being therefrom precluded expressly,

and it was a condition of the Weeks Act that the Legisla-

ture should so thus do before the United States assumed

to claim title. So here, when the Legislature was thus

without power to surrender the state sovereign authority

as to taxation, the tax imposition remained in virtue of

the Constitution, and quo ad the taxing power the acquisi-

tion of these minerals by the Government was such as that

the taxing power remained. Compare Gunter v. Jackson,

130 Miss. 686, 94 So. 842.

VII. Wherever in Mississippi, There Is a Statutory Power

Vested in a Board of Limited and Special Jurisdic-

tion, It Must Act by Its Minutes and Its Minutes

Must Affirmatively Disclose the Jurisdiction. A

Failure So Thus to Do Invalidates.

And so, Mississippi, by reason thereof, never surrendered

to the United States its tax sovereignty as to these min-

erals under this alleged reservation. Wherever in Missis-

sippi there is vested in a board of limited and special juris-

diction, it must act by its minutes and its minutes must

affirmatively disclose the jurisdiction. A failure so thus

to do invalidates. The entries made by the Forestry Com-

mission, Tr. 156, and by the Board of Supervisors, Tr. 158,

161, with deference, directly contravenes that thus made

mandatory by our decisions beginning with Bolivar County

v. Coleman, 71 Miss. 832, 15 So. 107, and the multitude of

cases which followed it. Compare Green v. Board of Super-

visors of Adams County, 172 Miss. 573, 161 So. 139, 141,

wherein it is said:

‘Tt is the settled rule in this state that boards of

supervisors exercise only limited and special juris-

diction, and that in the exercise of their limited statu-

tory authority all the necessary jurisdictional facts

must appear on the record of their proceeding. And

an order of: the board of supervisors authorizing the

issuance of bonds which does not affirmatively show the

facts necessary to give the board jurisdiction is void.

(Citing many cases.).’’

Approved in Simpson County v. Floyd, 192 Miss. 501, 6 So.

2d 580.

Consent in accordance with Mississippi’s laws being thus

requisite and not having been, Mississippi’s exclusive ter-

ritorial jurisdiction was never divested.

For these several reasons in view of the presumption of

validity under Mississippi’s tax sale statute, it is obvious

that the title so obtained is paramount for these many

reasons. The Government never effectively controverted,

with deference, on any substantial ground these positions

and especially never fairly met the issue that under the

Weeks Act a reservation of this type developed as this

was continued all property rights in the minerals wherefor

the Government had not paid and whereasto the reservor

continue to be vested with perfect title with full right of

development, but if therein we err, then the possibility of

reverter under the background here existent was divested

through paramount state sovereignty.

Pornt III

The Weeks Act, If It Embraced, the Acquisition of Severed

Minerals, Was Unauthorized by the Federal Constitu-

tion.

Wherein consider:

1. The Commerce Clause. We submit that being a gov-

ernment of limited power, as hereinabove set forth, Con-

gress could not validly have passed the Weeks Act to au-

thorize the purchase—the condemnation—of underlying

minerals, thereasto not being in any way appropriate as to

navigation of the streams.

2. There is a contravention of the Tenth Amendment.

So these factors being integrated there was a sale by

Mississippi to Hendrix of these minerals on September 21,

1942, whereby as at that date he became the absolute owner,

but without right to possession for a period of two years,

during which the right to redeem persisted. Before the

expiration of these two years the United States, during a

war period, took possession of the minerals and thereasto

made precisely those leases which were potentially possible

through the development made by Kalmia and that now

by the Government contended is that all of these questions

fundamentally integrated have been by this reservation

wiped out because under the reservation the provision for

extension was, Tr. 23:

‘¢Provided; That if at the termination of the said

ten year period of reservation it is found that such oil,

gas, and other valuable minerals, mineral rights, and

interests are being operated at any time during the

preceding five years, to commercial advantage, then

and in that event, the said right to mine and remove

said oil, gas, and other valuable minerals, shall extend

for a further period of five years, and further: That

the right to mine and remove oil, gas, and other valu-

able minerals shall extend * * *.’’

Without more ado, the Government took possession and

excluded Hendrix, taking the position properly that it was

not as a sovereign subject to a suit and yet with these

judicial questions thus therein it excluded Hendrix, and

in thus doing without affording an opportunity for judicial

determination, it extended (independently of all else) this

reservation under well settled principles hereinabove set

forth.

Compare 2 Summers Oil and Gas, 2nd Ed., Ch. 10, See.

301, p. 159, and authorities supra.

Furthermore, the United States, not being subject to

suit, prevented by its act this determination from being

there made, and having thus prevented the performance

of a condition may not therefrom profit and take from

Hendrix that information developed and that profit poten-

tially possible, in virtue of its sovereignty. Furthermore,

a contract of this kind which thus effectively deprived

Hendrix of access to the courts for a determination of his

controversy is void. Again, when this tax sale was thus

made and Hendrix became the purchaser, every presump-

tion under Mississippi’s law was pledged prima facie

thereto and it became obligatory upon the United States,

when it sought to subvert that title affirmatively, to prove

judicially those factors therefor requisite, and when the

courts below imposed this obligation contrary to the

statute, upon petitioner, Hendrix, thereby there was con-

travention of the law.

Pornt IV

Under the Original Reservation Kalmia Had the Unques-

tioned Right to Remove All Oil, Being Possessed Thereof

as of a Determinable Fee.

The reasons therefor have hereinabove been stated in

another aspect under Point II, subdivision II and are not

restated but are integrated by reference.

Pornt V

Property in Oil Is Admeasured by State Not Federal Law

Covered in Point II, subdivision V, supra, and reinte-

grated by reference,

a iE a al ld Poe PCE PO

Pornt VI

Under the Reservation of the Oil, under a Deed Prepared

by the Government, Underlying Weeks Land, With the

Policy of the National Forest Reservation Commission

Thereasto, the Provision in the Deed Requiring “It Be

Found” in Order to Effectuate Further Renewals, by Rea-

son of the United States Not Being Suable and the Other

Reasons Herein Set Forth, Made the Provisions in the

Deed Covenants Compensable in Damages Not Conditions

Whereunder Forfeiture Might Be.

Fully developed supra under Point II, subdivision V, and

reintegrated by reference.

Point VII

The Court of Appeals in the Fifth Circuit in Holding Kalmia

Not Entitled to Rely upon Representations of Government

Officials as to the Extent of the Provisions to be Contained

in the Deed and Excluding as Incompetent Evidence Ten-

dered, Established a Rule (a) Contrary to the Rule in This

Court, Bull v. United States, 295 U. 8. 261, 79 L. ed. 1421;

(b) Contrary to the Rule in the Second Circuit and

Others, Staten Island Hygeia Ice & Cold Storage Co. v.

United States, 85 Fed. 2d 68; and (c) Contrary to the Law

as Announced by the Supreme Court in the State of Mis-

sissippi.

1. Compare Penn Mut. Life Ins. Co. v. Nunnery, 176

Miss. 197, 167 So. 416, 418, wherein it is said:

which is but « form of the expression of an opinion,

does not ordinarily constitute a predicate for a fraud.

For it to do so, it must be accompanied by some in-

equitable conduct by the person making it, which in-

duced another to rely and act thereon. 2 Pom. Eq.

Sees. 842-847. One instance of such conduct is where

the maker of misrepresentations has or professes to

have knowledge of the law superior to that of a person

to whom the representation is made, and thereby in-

duces such person to rely and act on the misrepresenta-

Sp. Penn Muiual Life Ins. Co. v. Numnery, Miss., 167 So.

420. Approved in Watson v. Massachusetts Mut. Life Ins.

Co., C. C. A. D. C., 140 Fed. 2d 673, certiorari denied, 322

U. S. 746, 88 L. ed. 1578.

2. Compare Nash Mississippi Valley Motor Co. v. Chil-

dress, 156 Miss. 157, 125 So. 708, 709, wherein it is said:

‘“* —6* )~* Tf a false statement is made by one who

may be fairly assumed to know what he is talking about,

it may be accepted as true, without question and with-

out inquiry, althongh the means of correct informa-

tion areinreach. * * *.’’

Most recently approved in James v. Federal Royalty Com-

pany, — Miss. —, 44 So. 2d 542, 544; Brown v. Ohman, —

Miss. —, 42 So. 2d 215, 43 So. 2d 729; Reed v. Charping,

— Miss. —, 41 So. 2d 12; White v. Union Producing Com-

pany, 140 Fed. 2d 176, 178, wherein Judge Mize was re-

versed, the Court there saying:

‘“‘The court said that, assuming the fraud to have

been perpetrated and that the lessor did not read the

lease, or the draft for five dollars given her for execut-

ing it, yet she was guilty of such gross negligence in

failing to read the draft that she was precluded from

claiming that the agreement should be set aside for

fraud. For this reason it held that she could not re-

cover. We think the court erred in so holding, because

under the Mississippi law, which governs our decision,

contributory negligence is not a defense to an action

based on fraud. The appellant, Mrs. White, had the

right to rely upon the representations made to her

by the appellee’s agent as to the nature of the paper

she was asked to sign, and to accept his statements as

true without inquiry, although the means of correct

information were within reach.’’

Remember Conarro was deputed by the Department to act

for t when hereasto it had a fixed policy whereof he was

constructively well advised and so being obligated thereto

to conform. Montgomery was the attorney for the Govern-

ment and made, according to the proof, a positive repre-

sentation wherethrough the Government acquired the deed

forn as is contrary to Kalmia’s unquestioned right under

the Weeks Act, under the interpretation thereof; and when

the District Judge and the Court of Appeals ruled as was

done in Finding No. 9, Tr. 423, quoted supra, contravention

of Mississippi’s decisions was flagrant if Mississippi’s law

is t» control which, we submit, with deference, it should.

Pornt VIII

Provisions in Reservation Deleted by Regulation of Donald

M. Nelson, Supra, and by the Petroleum Administrator,

Supra, After Execution of the Alleged Reservation.

Thereasto, those with power to act for the Government

did in conflict with these terms in the deed as to twenty-five

acres so provide and absolutely prohibited that figure from

being further lawful. Covered supra, Point II, subdivision

V(f). Obviously here the subsequent action controlled and

abrogated. ‘‘Leges posteriores priores contrarias abro-

gaat’’,52C. J. 8.1046; Broom’s Legal Maxims, pp. 27, 28.

Point IX

The Weeks Act and the Public Policy of the National For-

est Reservation Commission Thereasto, Petitioners Rep-

resentatives Were Actually Deceived by Those Things

to Them Told and Having So Been, Thereasto Were En-

titled to Relief.

Point II, supra, passim.

Pornt X

The Legislature of Mississippi Prohibited from Consenting

That the United States Might Acquire the Oil and, Quo

Ad the Oil, the Assumed Consent of the Legislature a

Nullity.

Covered in Point II, subdivision VI, supra, and reinte-

grated by reference.

Pornt XI

Wherever in Mississippi, There Is a Statutory Power

Vested in a Board of Limited and Special Jurisdiction,

It Must Act by Its Minutes and Its Minutes Must Affirma-

tively Disclose the Jurisdiction. A Failure So Thus to

Do Invalidates.

Covered in Point II, subdivision VII, supra, and reinte-

grated by reference.

Conclusion

The action of the Government hereasto wrecked Kalmia

and imposed upon its guarantors onerous obligations and

overlooked, through the action of its local representatives,

the fundamental public policy of the Weeks Act which in

no way sought to divest without compensation minerals

from its subjects. Herein, it is respectfully submitted:

1. That there is an irreconcilable conflict between State

of Washington v. United States, 87 Fed. 2nd 421, C. C. A. 9th,

and the decisions in this Court and the ruling herein as to

indispensable parties rendering rectification here requisite.

2. That herein under the Weeks Act, if properly con-

strued, there remained vested in Kalmia this oil substan-

tially in fee and wrongfully divested by the Court of Ap-

peals under a construction of ‘‘commercial advantage’’

wholly foreign to the purpose and intent of the Weeks Act.

3. That the representatives of the Government in obtain-

ing these deeds made hereasto false representations where-

from the United States has been given a monumental ad-

vantage and the ruling in this case permitting confirmation

is in palpable conflict with the rule in this Court in the cases

of Bull v. United States, 295 U. S. 247, 79 L. ed. 1421; Snell

v. Ins. Co., 98 U. 8. 85, 25 L. ed. 52; United States v. State

National Bank, 96 U. S..30, 24 L. ed. 647; in the Second

Circuit in the case of Staten Island Hygeia Ice & Cold Stor-

age Co. v. United States, 85 Fed. 2d 68; and in the Supreme

Court of the State of Mississippi, compare authorities

supra; this Court remembering that the District Judge

specifically excluded the direct representation, false in

fact, made by t

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