The opinion of the court was delivered by: HENDERSON
HENDERSON, District Judge.
Claiming that five oil and gas leases on lands in the Allegany Indian Reservation are invalid, the Government seeks judgment against the Devonian Gas and Oil Company, J. Cordell Moore, C. Walter Harris, Tom Black, A. W. Robertson, M. L. McCullough, Christopher W. Hurley and Frederick J. Meyer, as alleged holders and owners of interests or rights under the leases. Entered into on December 1, 1955, the leases cover some 18,000 acres of land, half of which will be subject to flooding. Neither the leases nor the assignment of the leases involved were approved by state or federal authorities.
In entering into the leases the Seneca Nation was represented by an attorney who met with the Nation's Council and advised concerning the lease rights. The Government does not contend that the leases are other than fair and just, that there was overreaching on the part of the lessees, or that there has been any default by the lessees or their assignees. However, the Government claims that in the absence of compliance with the provisions of the Federal Act of May 11, 1938 (52 Stat. 347, 25 U.S.C. §§ 396a, 396b, 396c and 396d), the leases are void.
Should those provisions be applicable to the leases in question, there appears to be no doubt as to the correctness of the Government's claim. See Heckman v. United States, 224 U.S. 413, 32 S. Ct. 424, 56 L. Ed. 820 (1912); Smith v. McCullough, 270 U.S. 456, 46 S. Ct. 338, 70 L. Ed. 682 (1926); Stoltz v. United States, 99 F.2d 283 (9th Cir. 1938); American Surety Co. of New York v. United States, 112 F.2d 903 (10th Cir. 1940).
The statutes provide that "unallotted lands within any Indian reservation or lands owned by any tribe, group, or band of Indians under Federal jurisdiction * * * may, with the approval of the Secretary of the Interior, be leased for mining purposes, by authority of the tribal council * * * for terms not to exceed ten years and as long thereafter as minerals are produced in paying quantities,"
that "[leases] for oil and/or gas-mining purposes * * * shall be offered for sale to the highest responsible qualified bidder, at public auction or on sealed bids,"
that lessees "* * * shall furnish * * * bonds, in amounts satisfactory to the Secretary of the Interior * * *"
and, additionally, that all such leases shall be subject to "* * * the rules and regulations promulgated by the Secretary of the Interior."
Such regulations have been promulgated
and, among other things, provide for an acreage limitation,
a restriction on assignment
and for the manner of cancellation.
Obviously, the United States, acting to safeguard the Indians in the conduct of their affairs, has established a comprehensive statutory and regulatory scheme covering mineral leasings on tribal lands. Such action, of course, is consistent with the historical relationship of guardian and ward existing between the United States and Indian tribes. See United States v. Kagama, 118 U.S. 375, 6 S. Ct. 1109, 30 L. Ed. 228 (1886); Tiger v. Western Inv. Co., 221 U.S. 286, 31 S. Ct. 578, 55 L. Ed. 738 (1911); United States v. Waller, 243 U.S. 452, 37 S. Ct. 430, 61 L. Ed. 843 (1917); United States v. Nice, 241 U.S. 591, 36 S. Ct. 696, 60 L. Ed. 1192 (1916); Brader v. James, 246 U.S. 88, 38 S. Ct. 285, 62 L. Ed. 591 (1918); Sunderland v. United States, 266 U.S. 226, 45 S. Ct. 64, 69 L. Ed. 259 (1924); Board of Comm'rs of Creek County v. Seber, 318 U.S. 705, 63 S. Ct. 920, 87 L. Ed. 1094 (1943).
To avoid the effect of non-compliance with the federal statutes and regulations, the defendants rely upon sections 5 and 7 of a 1950 act entitled "An Act To regulate the collection and disbursement of moneys realized from leases made by the Seneca Nation of Indians of New York, and for other purposes" (64 Stat. 442). Those sections provide:
"Sec. 5. In addition to the authority now conferred by law on the Seneca Nation of Indians to lease lands within the Cattaraugus, Allegany, and Oil Springs Reservations to railroads and to lease lands within the limits of the villages established under authority of the Act of February 19, 1875 (18 Stat. 330), the Seneca Nation of Indians, through its council, is authorized to lease lands within the Cattaraugus, Allegany, and Oil Springs Reservations, outside the limits of such villages, for such purposes and such periods as may be permitted by the laws of the State of New York.
"Sec. 7. All Acts or parts of Acts inconsistent with this Act are hereby repealed."
The defendants claim that this act completely withdrew federal supervision over mineral leasings by the Seneca Nation and, in the absence of applicable state laws, lodged unguarded control over mineral leasings in the Nation.
While the 1950 act clearly was intended to withdraw the United States from certain activities involving the collection and disbursement of leasing funds and thereby permit the closing of the local Indian agency, ascertainment of the intentions of Congress in enacting sections 5 and 7 requires more than a surface reading. Initially, reference to the history of those earlier acts, which section 5 supplements, is helpful.
Prior to 1875 non-Indian settlers leased reservation lands from the Seneca Indians without the approval of the United States. Such leases, purportedly ratified by the State of New York, were invalidated by an unreported decision of the New York Supreme Court.
Consequently, the Act of February 19, 1875 (18 Stat. 330) was passed. That act ratified existing leases of lands within the Cattaraugus and Allegany Reservations to railroad corporations and authorized the Seneca Nation, in accordance with its laws, to lease lands for railroad purposes. In addition, the act ratified existing leases of lands within specified villages (the boundaries of which were to be established under the provisions of the act) for a period not to exceed five years. Thereafter, the Nation was authorized to renew leases within the villages for periods not to exceed twelve years.
The Act of September 30, 1890 (26 Stat. 558) merely extended the authorized period for leasings within the villages ...