                                      No. 12325

         I N THE SUPREME C U T O THE STATE O MONTANA
                          OR    F           F

                                          1973



THE SECURITY STATE BANK,
a corporation,

                                      P l a i n t i f f and Respond



ISAAC RICHARD PIERRE, same a s
RICHARD PIERRE,

                                      Defendant and Appellant.



Appeal from:           D i s t r i c t Court of t h e Fourth J u d i c i a l D i s t r i c t ,
                       Honorable E. Gardner Brownlee, Judge p r e s i d i n g .

Counsel of Record:

      For Appellant :

             Richard A . Baenen argued, Washington, D. C .
             V i c t o r F. V a l g e n t i appeared, Missoula, Montana.

      For Respondent:

             F. N. Hamman, Polson, Montana.
             C h r i s t i a n s e n , McCurdy , Ingraham and Wold, Polson,
              Montana.
             F. L. Ingraham argued, Polson, Montana.

             Amicus Curiae

             Jean A . Turnage argued, Polson, Montana.
             ~ a m fE. Haddon argued, Missoula , Montana.

                                      -



                                                 Submitted:       May 31, 1973

                                                   Decided :JUN 2       0 1973
F i l e d : JUN   2 0 197'
M r . J u s t i c e John Conway Harrison d e l i v e r e d t h e Opinion of t h e
Court.

       This i s an appeal from an o r d e r of t h e d i s t r i c t c o u r t of
t h e f o u r t h j u d i c i a l d i s t r i c t , county of Lake, Hon. E. Gardner
Brownlee, judge p r e s i d i n g , g r a n t i n g d e f a u l t judgment a g a i n s t an
e n r o l l e d Indian.     The cause was o r i g i n a l l y heard i n t h i s Court
i n December 1972, and an opinion issued i n February 1973, which
was r e c a l l e d and t h e cause was reheard on May 31, 1973.
       The s o l e i s s u e on appeal i s whether t h e s t a t e c o u r t s of
Montana have j u r i s d i c t i o n over a c i v i l d i s p u t e involving a com-
mercial t r a n s a c t i o n entered i n t o on t h e Flathead Reservation
between an enroll-ed member of t h e Confederated S a l i s h and Kootenai
Tribes r e s i d i n g on t h e r e s e r v a t i o n and a nonmember.
       The r e l e v a n t f a c t s a r e n o t i n d i s p u t e and were s t i p u l a t e d
t o a t a hearing b e f o r e t h e t r i a l c o u r t .         Judge Brownlee f o r
hearing purposes joined t h i s case and t h e c a s e of R.onan S t a t e
Bank v. Jewett, due t o t h e f a c t t h e same j u r i s d i c t i o n question
was involved       .
       I n view of t h e complexity of j u r i s d i c t i o n questions involving
Indian r e s e r v a t i o n s and t h e number of c a s e s t h a t t h i s Court i s
r e c e i v i n g , w e w i l l d e t a i l t h e s t i p u l a t e d f a c t s with t h e thought
t h a t somewhere i n t h e f e d e r a l a p p e l l a t e process t h e f i n a l author-
i t y w i l l be a b l e t o more c l e a r l y understand t h e p e r p l e x i t y of
s t a t e j u r i s d i c t i o n a l problems and t h e near i m p o s s i b i l i t y of t h e i r
s o l u t i o n due t o p r i o r f e d e r a l d e c i s i o n a l c a s e law.
       Defendant I s a a c Richard P i e r r e i s an e n r o l l e d t r i b a l member,
l i v i n g w i t h i n the confines of t h e r e s e r v a t i o n .        P i e r r e borrowed
money from p l a i n t i f f S e c u r i t y S t a t e Bank g i v i n g a n o t e a s e v i -
dence of t h e loan a t Polson, Montana, l o c a t e d within t h e e x t e r i o r
boundaries of t h e Flathead Indian Reservation.                             Such r e s e r v a t i o n
i s located i n four c o u n t i e s of t h e s t a t e , Missoula, Lake, Sanders
and Flathead, and c o n s i s t s of approximately 1,250,000 a c r e s of
which 615,418 a c r e s i s t r u s t land.               The t o t a l r e s i d e n t membership
o f t h e t r i b e i s 19 p e r c e n t of t h e t o t a l population l i v i n g w i t h i n

t h e e x t e r i o r boundaries of t h e r e s e r v a t i o n .        The f u l l blood en-
r o l l m e n t of t h e t r i b e i s 3 - 3 p e r c e n t .   Defendant P i e r r e p o s s e s s e s
t h r e e q u a r t e r s I n d i a n blood.     I n 1924, a l l persons of I n d i a n
h e r i t a g e were d e c l a r e d United S t a t e s c i t i z e n s .     The Flathead
T r i b e was i n c o r p o r a t e d a s a f e d e r a l c o r p o r a t i o n under t h e Wheeler-
Howard Act i n 1935, t h e I n d i a n Reorganization Act, 25 U.S.C.
$ 1 4.61 e t s e q ,
        Under t h e p r o v i s i o n s of t h e f e d e r a l c h a r t e r t h e t r i b e i s
t o be s e l f - g o v e r n i n g and one of i t s powers i s t o s e t up a c o u r t
system.       The Flathead T r i b a l Court h a s a c h i e f judge and t h r e e
a s s o c i a t e judges who t r y c a s e s and when n e c e s s a r y t h e t h r e e a s s o -
c i a t e judges s e r v e a s an a p p e l l a t e c o u r t .      These judges a r e n o t
l e g a l l y t r a i n e d b u t a r e l a y people, s i m i l a r t o j u s t i c e s of t h e
peace.       There i s no a p p e l l a t e procedure from a d e c i s i o n of t h e
t h r e e judge t r i b a l c o u r t .
        Following t h e o r i g i n a l r e c a l l e d opinion i n t h e i n s t a n t c a s e ,
t h i s Court decided a n o t h e r I n d i a n j u r i s d i c t i o n a l m a t t e r , S t a t e
ex r e l . Mary I r o n Bear v. D i s t r i c t Court of t h e F i f t e e n t h J u d i c i a l
District,              Mont   .        9           P.2d          ,   30 St.kep.       482,490.
I n I r o n Bear t h e Court s a i d :
        lt
          Before a d i s t r i c t c o u r t can assume j u r i s d i c t i o n
        i n any m a t t e r submitted t o i t , i t must f i n d s u b j e c t
        m a t t e r j u r i s d i c t i o n by determining:          (1) whether
        t h e f e d e r a l t r e a t i e s and s t a t u t e s a p p l i c a b l e have
        preempted s t a t e j u r i s d i c t i o n ; (2) whether t h e exer-
        c i s e of s t a t e j u r i s d i c t i o n would i n t e r f e r e w i t h
        r e s e r v a t i o n self-government; and (3) whether t h e
        T r i b a l Court i s c u r r e n t l y e x e r c i s i n g j u r i s d i c t i o n
        o r has e x e r c i s e d j u r i s d i c t i o n i n such a manner a s
        t o preempt s t a t e j u r i s d i c t i o n . I I
        Here, n o t one o f t h e C o u r t ' s r e q u i r e d t h r e e t e s t s i s met.
A t t h e time of t h e f i l i n g of t h e i n s t a n t c a s e i n t h e d i s t r i c t c o u r t

t h e T r i b a l Court was i n e x i s t e n c e though i t had no ordinance on
debt a c t i o n s nor was i t p o s s i b l e f o r a nonIndian t o sue an I n d i a n
unless t h e I n d i a n s t i p u l a t e d t o being sued.           However, t h a t s i t u a -
t i o n has now changed and l i m i t e d d e b t a c t i o n s can now b e f i l e d i n
T r i b a l Court and nonIndians can sue t r i b a l members.
       The t r i a l c o u r t and t h i s Court received comprehensive b r i e f s
from t h e p a r t i e s .   Defendant r e l i e s on a number of r e c e n t Montana
cases:      Kennerly v. D i s t r i c t Court, 400 U,S. 423, 425, 9 1 S e c t .
480, 27 L ed 2d 507; Crow Tribe v. Deernose, 158 Mont, 25, 487
P.2d 1133; Blackwolf v. D i s t r i c t Court, 158 Mont, 523, 493 P.2d
1293; S t a t e ex r e l . I r o n Bear v. D i s t r i c t Court,           -Mont        Y
                                                                                         -*



-P.2d       -9        30 St.Rep.       482,
       Defendant argues t h e f a c t s h e r e and those i n Kennerly
cannot be d i s t i n g u i s h e d t h e r e f o r e Kennerly c o n t r o l s and t h e
a c t i o n of t h e t r i a l judge should be reversed.                  In Kennerly, two
members of t h e Blackfeet Indian Tribe, r e s i d i n g on t h e Blackfeet
Indian Reservation, purchased over $200 worth of food on c r e d i t
from a grocery s t o r e located on t h e r e s e r v a t i o n and refused t o
pay a f t e r t h e goods were consumed.                S u i t was begun i n t h e s t a t e
d i s t r i c t c o u r t a g a i n s t t h e Indian t o c o l l e c t t h e debt.      Defendant
Indians moved t o dismiss t h e s u i t on t h e grounds t h e s t a t e c o u r t
lacked j u r i s d i c t i o n due t o t h e f a c t defendants were members of
t h e Blackfeet Tribe and t h e t r a n s a c t i o n took place on t h e r e s e r -
vation.
       The d i s t r i c t c o u r t overruled defendants' motion and de-
fendants applied t o t h i s Court f o r a w r i t of supervision which
was granted.          I n i t s opinion, t h i s Court upheld t h e a c t i o n of
the d i s t r i c t court.       S t a t e ex r e l . Kennerly v. D i s t . Court, 154
Mont. 488, 466 P,2d 85.                On a w r i t of c e r t i o r a r i t o t h e United

S t a t e s Supreme Court, t h a t c o u r t overruled t h i s Court's decision
holding t h a t t h e s t a t e of Montana lacked j u r i s d i c t i o n over t h e
Indians of t h e Blackfeet Tribe because t h e s t a t e had never taken
t h e necessary "affirmative l e g i s l a t i v e a c t i o n " concerning e i t h e r
c i v i l o r criminal j u r i s d i c t i o n with r e s p e c t t o the r e s e r v a t i o n .
The United S t a t e s Supreme Court quoted from the Act of August 15,
1953, 67 S t a t , 590, Section 7, which provides:
        "The consent of t h e United S t a t e s i s hereby given
        t o any o t h e r S t a t e n o t having j u r i s d i c t i o n with
        r e s p e c t t o c r i m i n a l offenses o r c i v i l causes of
        a c t i o n , o r with r e s p e c t t o both, a s provided f o r
       i n t h i s Act, t o assume j u r i s d i c t i o n a t such t i m e
       and i n such manner a s t h e people of t h e S t a t e s h a l l ,
       by a f f i r m a t i v e l e g i s l a t i v e a c t i o n , o b l i g a t e and
       bind t h e S t a t e t o assumption thereof."
A r e s u l t of t h e Kennerly decision was t o dry up c r e d i t sources
throughout t h e s t a t e t o responsible Indian c i t i z e n s , a void n o t
f i l l e d by any f e d e r a l source.
       However, i n t h i s c a s e , u n l i k e Kennerly, t h e s t a t e has
passed enabling l e g i s l a t i o n with r e s p e c t t o j u r i s d i c t i o n over
Indians r e s i d i n g on t h e Flathead Reservation.                  T i t l e 83, Chapter
$,   s e c t i o n s 83-801 through 83-804, R.C.M.              1947, provides f o r
t h e assumption of c i v i l and/or criminal j u r i s d i c t i o n over Indians
of t h e Flathead T r i b e and t h e t i m e and manner by which such
j u r i s d i c t i o n could be assumed.       The l e g i s l a t u r e conditioned assump-
t i o n of j u r i s d i c t i o n by t h e s t a t e on t h e w r i t t e n consent of t h e
t r i b e , a s expressed by a formal r e s o l u t i o n ,         A p e r t i n e n t provi-

s i o n of s e c t i o n 83-802, R.C.M.        1947, reads:
       "Whenever t h e governor of t h i s s t a t e s h a l l r e c e i v e
       from t h e t r i b a l council o r o t h e r governing body
       of t h e Confederated S a l i s h and Kootenai Indian t r i b e s ,
       community, band o r group o f Indians i n t h i s s t a t e ,
       a r e s o l u t i o n , expressing i t s d e s i r e t h a t i t s people
       and lands be s u b j e c t t o t h e c r i m i n a l and/or c i v i l
       j u r i s d i c t i o n of t h e s t a t e of Montana t o t h e e x t e n t
       authorized by f e d e r a l law and r e g u l a t i o n , he s h a l l
       i s s u e within s i x t y (60) days a proclamation t o t h e
       e f f e c t t h a t such j u r i s d i c t i o n s h a l l apply t o those
       Indians and t h e i r t e r r i t o r y , o r r e s e r v a t i o n i n ac-
       cordance with t h e provisions of t h i s a c t , *               * *".
        (Emphasis added).
       S t a t e law precludes Montana from assuming j u r i s d i c t i o n over
Indians on t h e r e s e r v a t i o n not tendered by t h e t r i b e s by formal
resolution.        I n a r e c e n t c a s e , S t a t e ex r e l , McDonald v. D i s t r i c t
Court of t h e Fourth J u d i c i a l D i s t r i c t ,          M nt
                                                                  o     .        , 496    P.2d
78,80, 29 St.Rep,          265, 268, we reviewed t h e s t e p s taken by t h e
Flathead Tribe i n p r e s e n t i n g a r e s o l u t i o n t o t h e governor on
accepting s t a t e j u r i s d i c t i o n :
     t t T r i b a l consent t o t h e assumption of criminal j u r i s -

     d i c t i o n by t h e s t a t e c o u r t s of Montana over Indians
     committing crimes on t h e Flathead Indian Reservation
     was granted by t h e enactment of T r i b a l Ordinance 40-A,
     dated May 16, 1964. The governor of Montana t h e r e a f t e r
     i s s u e d t h e required proclamation on June 30, 1964.
       Amost a year l a t e r on May 5 , 1965 T r i b a l Ordinance
       40-A (Revised) was enacted. This ordinance was
       s i m i l a r t o t h e o r i g i n a l Ordinance 40-A except f o r
       c l a r i f y i n g language l i m i t i n g i t s scope t o c r i m i n a l
       laws and r e p e a l i n g t h e o r i g i n a l Ordinance 40-A, The
       governor of Montana t h e r e a f t e r i s s u e d another procla-
       mation accordingly dated October 8 , 1965,
       "Several months l a t e r on June 22, 1966, T r i b a l Resolu-
       t i o n 1973 was enacted expressly r e s c i n d i n g T r i b a l
       Ordinances 40-A and 40-A (Revised), There i s no e v i -
       dence t h a t t h i s T r i b a l Resolution was ever t r a n s m i t t e d
       t o o r received by t h e governor of Montana; nor was any
       proclamation of t h e governor made i n connection with
       t h i s Resolution. On June 30, 1966, T r i b a l Resolution
       1997 was enactedtjhich expressly rescinded T r i b a l Reso-
       l u t i o n 1973 enacted e i g h t days previously. Again no
       governor's proclamation was i s s u e d concerning T r i b a l
       Resolution 1997.
       "On September 15, 1967 T r i b a l Resolution 2318 was en-
       a c t e d r e q u e s t i n g t h e governor of Montana t o extend t h e
       time l i m i t f o r withdrawal from s t a t e j u r i s d i c t i o n f o r
       an a d d i t i o n a l year a f t e r October 7, 1967, and with-
       drawing i t s consent t o such s t a t e j u r i s d i c t i o n , It
       f u r t h e r provided t h a t t h i s T r i b a l Resolution was n u l l
       and void i f t h e governor extended such time l i m i t a s
       requested, On October 8 , 1967 t h e governor i s s u e d a
       t h i r d proclamation extending t h e t i m e l i m i t f o r t h e
       ~ribe's       withdrawal of t h e i r consent t o s t a t e j u r i s d i c -
       t i o n f o r an a d d i t i o n a l year from October 7, 1967.
       re in ally, on A p r i l 30, 1971, t h e T r i b a l Council passed
       a motion 1 t o seek r e t r o c e s s i o n on S t a t e Concurrent
       ~ u r i s d i c t i o n ' . The record d i s c l o s e s no f u r t h e r a c t i o n
       i n conformity with t h i s motion."
        Section 83-801, R..C.M.            1947, provides:
       "Criminal j u r i s d i c t i o n of Flathead Indian country
       t o be assumed. The s t a t e of Montana hereby o b l i -
       g a t e s and binds i t s e l f t o assume, a s h e r e i n provided,
       c r i m i n a l j u r i s d i c t i o n over Indians and Indian ter-
       r i t o r y of t h e Flathead Indian r e s e r v a t i o n and country
       w i t h i n t h e s t a t e i n accordance with t h e consent of t h e
       United S t a t e s given by t h e a c t of August 15, 1953 (Public
       Law 280, 83rd Congress, 1st s e s s i o n ) . 11
       N r e f e r e n c e i s made t o c i v i l j u r i s d i c t i o n i n t h e above
        o
quoted s e c t i o n , however, i n s e c t i o n 83-802, R.C.M.               1947, s e t t i n g
up t h e procedure f o r t h e t r i b e s t o r e q u e s t s t a t e j u r i s d i c t i o n ,
t h i s language appears:
       "*   **   a r e s o l u t i o n , expressing i t s d e s i r e t h a t
       i t s people and lands be s u b j e c t t o +he c r i m i n a l
       and/or c i v i l j u r i s d i c t i o n of t h e s t a t e of Montana
       t o t h e e x t e n t authorized by f e d e r a l law and regu-
       lation     **    9c."


       T r i b a l Ordinance 40-A of t h e Confederated S a l i s h and Kootenai
T r i b e s of t h e Flathead Reservation, passed on May 15, 1964, s e t
f o r t h t h e e x t e n t of j u r i s d i c t i o r r and s u b j e c t s :
        " (a)      Compulsory School Attendance
        "(b)       P u b l i c Welfare
        " (c)      Domestic R e l a t i o n s (except a d o p t i o n s )
        "(d)       Mental H e a l t h , I n s a n i t y , Care of t h e Inform,
                   Aged and A f f l i c t e d
         " ( e ) J u v e n i l e Delinquency and Youth R e h a b i l i t a t i o n
         " ( f ) Adoption Proceedings (With consent of t h e
                   T r i b a l Court)
         " ' ( g ) Abandoned, Dependent, Neglected, Orphaned o r
                   Abused Children
         "(h) Operation o f Motor Vehicles Upon t h e P u b l i c
                   S t r e e t s , A l l e y s , Roads and Highways
         " ( i ) Laws of t h e S t a t e of Montana, and Ordinances
                   and Regulations of a Criminal Nature Applicable
                   w i t h i n I n c o r p o r a t e d C i t i e s and Towns, 11
        Less than a y e a r l a t e r on May 5 , 1965, T r i b a l Ordinance
4 0 4 (Revised) was passed by t h e T r i b a l Council which s p e c i f i -
c a l l y l i m i t e d j u r i s d i c t i o n t o c r i m i n a l laws,        Subsection ( i )
of 4 0 - A (Revised) r e a d s :

        " ( i ) A l l Criminal Laws of t h e S t a t e o f Montana;
        and a l l Criminal Ordinances of C i t i e s and Towns
        w i t h i n t h e Flathead I n d i a n Reservation." (Emphasis
        added).
        Worcester v . Georgia, 3 1 U.S.                      515, 8 L.Ed 483 (1832),
e s t a b l i s h e d t h a t t i t l e t o I n d i a n c o u n t r y meant more than t i t l e
w i t h i n t h e o r d i n a r y p r o p r i e t a r y concepts of our law o f r e a l
property.          It included a l l a s p e c t s of sovereign government
control.         These concepts--Indians b e i n g a f o r e i g n people and
I n d i a n c o u n t r y b e i n g a f o r e i g n land--are under p r e s e n t f a c t u a l
c o n d i t i o n s t o t a l l y i n c o n c i s t e n t w i t h t h e c i t i z e n s h i p of I n d i a n s
i n t h e United S t a t E s and t h e s t a t e wherein they r e s i d e .                        A s we
noted i n Kennerly, I n d i a n s of t h i s s t a t e a r e c i t i z e n s of Montana;
they a r e e n t i t l e d t o t h e p r o t e c t i o n of our laws and a r e r e s p o n s i -
b l e t o our laws; t h e y a r e e n t i t l e d t o v o t e and do s o ; many hold
p u b l i c o f f i c e ; they h e l p e l e c t t h e j u d i c i a r y of t h i s s t a t e ; and,
w e might add, they have l e g i s l a t o r s i n b o t h houses of our l e g i s -
lature.

        P l a i n t i f f a r g u e s t h a t t h e e f f e c t of Kennerly, Deernose and
Slackwolf i s t o c r e a t e among r e s e r v a t i o n I n d i a n s a s p e c i a l c l a s s
of c i t i z e n s having " r i g h t s " n o t a f f o r d e d o t h e r c i t i z e n s of t h e
s t a t e w h i l e a t t h e same t i m e denying b a s i c c o n s t i t u t i o n a l r i g h t s
t o t h o s e w i t h whom t h e I n d i a n s c r e a t e o b l i g a t i o n s otherwise en-
forceable i n the courts.                    F u r t h e r , t h a t such anomaly founded s o l e l y
upon e t h n i c c o n s i d e r a t i o n s i s wholly out of s t e p w i t h e n l i g h t e n e d
c o n s t i t u t i o n a l p r i n c i p l e s , c i t i n g : Boddie v. Connecticut, 401
U,S.    371, 9 1 S e c t . 780, 28 L ed 2d 113; Goldberg v. K e l l y , 397
U,S.    254, 90 S e c t , 1011, 25 L ed 2d 287; S t a n l e y v , I l l i n o i s ,
405 U.S.      645, 92 S e c t . 1208, 31 L ed 2d 551.
       A l l of the c i t e d cases consider the basic c o n s t i t u t i o n a l
p r i n c i p l e o f e q u a l p r o t e c t i o n of t h e law b e i n g a f f o r d e d a l l
c i t i z e n s notwithstanding differences i n race, alienage, r e l i g i o n ,
poverty, o r c l a s s .        W do n o t t a k e i s s u e w i t h p l a i n t i f f ' s argu-
                                 e
ment o r t h e c a s e s c i t e d , b u t f i n d w e a r e confronted w i t h t h e
r e c e n t United S t a t e s Supreme Court opinion i n Kennerly and w i t h
what we b e l i e v e t o b e , a t l e a s t now, t h e erroneous concept set
down i n Worcester t h a t t h e t r i b e s were n a t i o n s with whom t r e a t i e s
had t o b e made,          U n t i l t h a t concept i s changed, t h e r e i s l i t t l e
s t a t e c o u r t s can do t o a f f o r d t h e e q u a l p r o t e c t i o n o f o u r law t o
both i t s Indian and nonIndian c i t i z e n s on c i v i l m a t t e r s a r i s i n g
w i t h i n t h e e x t e r i o r boundaries of an I n d i a n r e s e r v a t i o n .
        Kennerly i s c o n t r o l l i n g and t h e s t a t e cannot e x e r c i s e
c i v i l j u r i s d i c t i o n where i t i n t e r f e r e s w i t h t h e self-government
of t h e Flathead T r i b e , o r impairs a r i g h t g r a n t e d , r e s e r v e d o r

preempted by Congress.                 Organized V i l l a g e of Kake v. Egan, 369
U.S.    60, 82 S.Ct.         562, 7 L ed 2d 573; Warren Trading Post v.
Arizona Tax Comm., 380 U.S.                  685, 85 S.Ct.          1242, 14 L ed 2d 165;
Williams v. Lee, 358 U.S.                 217, 79 S.Ct.          269, 3 L ed 2d 251.
        The d e c i s i o n of t h e d i s t r i c t c o u r t i s r e v e r s e d and i t s
o r d e r of June 7 , 1972, i s ordered vacated.



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 Associate Justices      f

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 Hon. Bernard Thomas, District
 Judge, sitting for Justice
 Wesley Castles,
