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United States v. Devonian Gas and Oil Co.

decided: January 26, 1970.

UNITED STATES OF AMERICA, PLAINTIFF-APPELLEE,
v.
DEVONIAN GAS AND OIL COMPANY, J. CORDELL MOORE, C. WALTER HARRIS, TOM BLACK, ESTATE OF ANDREW W. ROBERTSON, M. L. MCCULLOUGH, CHRISTOPHER W. HURLEY, AND FREDERICK J. MEYER, DEFENDANTS-APPELLANTS



Friendly, Smith and Anderson, Circuit Judges.

Author: Friendly

FRIENDLY, Circuit Judge:

This appeal from an order of the District Court for the Western District of New York requires interpretation of § 5 of the Seneca Leasing Act of 1950, 64 Stat. 442, as applied to oil and gas leases executed by the Seneca Nation to the defendants in 1955. Although the question is close, our conclusion differs from that of the district court.

Some historical background is needed to place the issue in focus: Of their once vast holdings in Western New York, the Senecas have retained only three reservations in the southwestern part of the State. Our concern is with the Allegany reservation. Prior to 1875 the Seneca Nation had granted leases to settlers within certain "villages" in that reservation, and the New York Legislature, apparently acting under Article I, § 13 of the New York Constitution, see fn. 3 infra, had purported to ratify these at various times. See, e.g., N.Y.Laws 1866, Chs. 263 and 462. After a state court held that the exclusive power to permit leases of reservation land was in the United States,*fn1 see 25 U.S.C. § 177, New York persuaded Congress to ratify the existing leases and authorize new ones within the "villages" for up to 12 years, 18 Stat. 330 (1875), later extended to 99, 26 Stat. 558 (1890). Many of the leases were in what is now the City of Salamanca, where an Indian Agent was in residence to collect the rents. See United States v. Forness, 125 F.2d 928 (2 Cir. 1942). In 1949 New York authorized the City to collect these and required it to pay them, whether or not collected, "to such person, officer, agency or organization as may be designated by or pursuant to act of congress." N.Y.Laws 1949, ch. 787. Mineral leases outside the villages were governed by the Federal Act of May 11, 1938, 52 Stat. 347, applicable to Indian tribes in general, which authorized leases "for terms not to exceed ten years and as long thereafter as minerals are produced in paying quantities," subject, however, to a requirement of competitive bidding and other protections.

The first four sections of the Seneca Leasing Act of 1950, 64 Stat. 442, were the federal counterpart of the 1949 New York legislation relating to the Salamanca leases. They eliminated the participation of a Federal Indian Agent in the collection process, authorized the Treasurer of the Seneca Nation to receive payments from the City, required him to post security, and provided for distribution of the proceeds among the members. Sections 5 and 7, with which we are concerned, provided as follows:

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.

In 1955 the defendants entered into oil and gas leases with the Seneca Nation for land within the Allegany reservation for terms of ten years and as long thereafter as oil or gas was produced in paying quantities. There was no competitive bidding, but it is not contended that the leases were unfair. Six years later the New York State Joint Legislative Committee on Indian Affairs rendered a report to the Legislature. In the course of extensive discussion of the entire problem of the leasing of Indian lands, the report recited, p. 8:

Until the present legislative session, the Seneca Nation of Indians had presented no request for legislation to implement the authorization granted by the August 14, 1950 Act of Congress. A bill now pending does, however, seek approval for leases up to ten years in duration.

Report of the N.Y.Joint Legis. Comm. on Indian Affairs, Legis.Doc. No. 28 (1961). The Committee recommended enactment of a bill, prepared by counsel for the Seneca Nation in line with a vote of the Seneca Council on March 26, 1960, authorizing leases "for a term not to exceed ten (10) years." This was enacted, effective April 17, 1961, N.Y.Laws 1961, ch. 702, N.Y.Indian Law § 78.

These actions were filed by the United States in 1963 for the taking of property, including that subject to defendants' leases, for the Allegheny River Reservoir project. In 1964 arrangements were made for substantial payments to the Seneca Nation and individual Indians, see 78 Stat. 738.*fn2 The United States then moved for summary judgment determining that the leases were invalid. After proceedings unnecessary to detail, the court granted such judgment and this appeal followed.

Two points about the statute seem completely clear. One is that federal control of leasing was withdrawn; the other is that New York control was allowed. Beyond this we enter a vale of ambiguity. The United States contends and the district judge held that the final clause of § 5 of the Seneca Leasing Act, "for such purposes and such periods as may be permitted by the laws of the State of New York," means "as may be specifically permitted." Defendants say it means "as shall not be prohibited."*fn3 Since the words are reasonably susceptible of either meaning, we must look elsewhere for help. "Where the mind labors to discover the design of the legislature, it seizes every thing from which aid can be derived." United States v. Fisher, 6 U.S. (2 Cranch) 358, 386, 2 L. Ed. 304 (1805) (Marshall, C. J.).

In the form in which it was introduced in the House and Senate, the Seneca Leasing Act authorized leasing outside the villages for periods not exceeding ten years, without reference to purposes or to the laws of New York. On August 8, 1949, while the bill was being considered by the House Committee on Public Lands and the Senate Committee on Interior and Insular Affairs, the Undersecretary of the Interior wrote to the Chairman of each committee:

Section [5] does not specify the purposes for which leases may be made and limits the period of any lease to not exceeding ten years. This period may be too short particularly as to mineral or other leases requiring extensive development. I believe that Section [5] should be amended by striking from lines 4 and 5, page 3, the words "for periods not to exceed ten years" and inserting in lieu thereof the words ...


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