390 U.S.

365
88 S.Ct. 982
19 L.Ed.2d 1238

Frank P. POAFPYBITTY et al., Petitioners,

v.
SKELLY OIL COMPANY.
No. 65.
Argued Jan. 24, 1968.
Decided March 18, 1968.

Charles Hill Johns, Midwest City, Okl., for petitioners.

John H. Cantrell, Oklahoma City, Okl., for respondent.
Mr. Chief Justice WARREN delivered the opinion of the Court.

The question presented is whether petitioners, who are Comanche Indians, have
standing to sue under an oil and gas lease approved by the Department of the
Interior for use on land held by Indians under trust patents issued by the United
States.

In 1947 the Acting Commissioner of Indian Affairs approved an oil and gas
lease which petitioners had executed to respondent, Skelly Oil Company, on the
form prescribed by the Department of the Interior. The first well was drilled in
1956, and seven producing wells were soon completed. In 1961 petitioners
retained counsel with the approval of the Department of the Interior1 and
brought this damage action against respondent in the District Court of
Oklahoma County, Oklahoma, alleging that respondent had breached the
express and implied covenants in the lease and had thereby impaired
petitioners' royalties. Respondent notified the Department of the Interior and
the Bureau of Indian Affairs of the litigation, but the Government made no
attempt to intervene in the proceedings. The petition filed in the District Court
asserted that respondent had permitted natural gas being produced from the
wells to escape despite the fact that there was a pipeline less than a mile from
the land.2 Petitioners claimed that respondent ignored their request that the gas
be marketed and continued to allow the gas to be wasted in violation of the

terms of the lease.3 The District Court sustained respondent's demurrer and
dismissed the petition. The Supreme Court of Oklahoma affirmed on the
ground that petitioners were precluded from suing by the provisions of the lease
and by the regulations promulgated by the Secretary of the Interior to control
oil and gas leases on restricted Indian land.4 We granted certiorari, 389 U.S.
814, 88 S.Ct. 30, 19 L.Ed.2d 64 (1967), to determine whether the federal
restrictions imposed on the Indians prevented them from vindicating their
rights. In our view, the decision below unduly restricts the right of the Indians
to seek judicial relief for a claimed injury to their interests under the oil and gas
lease.
3

The trust patents to the land in question were issued to petitioners under the
General Allotment Act of 1887, 24 Stat. 388, as amended, 25 U.S.C. 331
358, which provided that individual Indians were to be allotted land on their
reservations5 and that the United States was to hold the land 'in trust for the
sole use and benefit of the Indian' allottees for a 25-year period. 25 U.S.C.
348. During the trust period, which has been repeatedly extended,6 restricted
Indian land may be sold or leased only with the consent of the Secretary of the
Interior. In our view, these restrictions on the Indian's control of his land are
mere incidents of the promises made by the United States in various treaties to
protect Indian land and have no effect on the Indian's capacity to institute the
court action necessary to protect his property. In order to fulfill these national
promises to safeguard Indian land and at the same time 'to prepare the Indians
to take their place as independent, qualified members of the modern body
politic,' Board of County Comm'rs of Creek County v. Seber, 318 U.S. 705,
715, 63 S.Ct. 920, 926, 87 L.Ed. 1094 (1943), the allotment system was created
with the Indians receiving ownership rights in the land while the United States
retained the power to scrutinize the various transactions by which the Indian
might be separated from that property. Squire v. Capoeman, 351 U.S. 1, 9, 76
S.Ct. 611, 100 L.Ed. 883 (1956). See, e.g., 18 Cong.Rec. 190192 (1886).
This dual purpose of the allotment system would be frustrated unless both the
Indian and the United States were empowered to seek judicial relief to protect
the allotment. The obligation and power of the United States to institute such
litigation to aid the Indian in the protection of his rights in his allotment were
recognized in United States v. Rickert, 188 U.S. 432, 23 S.Ct. 478, 47 L.Ed.
532 (1903); Heckman v. United States, 224 U.S. 413, 32 S.Ct. 424, 56 L.Ed.
820 (1912); and United States v. Candelaria, 271 U.S. 432, 46 S.Ct. 561, 70
L.Ed. 1023 (1926). See generally Federal Indian Law 326341 (Dept. of
Interior, 1958). In Heckman, an action brought by the United States to set aside
an improper conveyance of restricted land, this Court realized that the allotment
system created interests in both the Indian and the United States.7 'A transfer of
the allotments is not simply a violation of the proprietary rights of the Indian. It

violates the governmental rights of the United States.' 224 U.S., at 438, 32 S.Ct.
at 432.
4

In holding that the United States could sue to protect the allotment, the Court
indicated that the Government could either bring the necessary suit itself or
allow the litigation to be prosecuted by the Indian.

'In what cases the United States will undertake to represent Indian owners of
restricted lands in suits of this sort is left under the acts of Congress to the
discretion of the Executive Department. The allottee may be permitted to bring
his own action, or if so brought, the United States may aid him in its conduct *
* *. And when the United States itself undertakes to represent the allottees of
lands under restriction and brings suit to cancel prohibited transfers, such action
necessarily precludes the prosecution by the allottees of any other suit for a
similar purpose relating to the same property.' Id., at 446, 32 S.Ct. at 435.

Later decisions followed the implications of Heckman and held that the right of
the United States to institute a suit to protect the allotment did not diminish the
Indian's right to sue on his own behalf. In Creek Nation v. United States, 318
U.S. 629, 63 S.Ct. 784, 87 L.Ed. 1046 (1943), this Court held that Indian tribes
had the power to sue a railroad for the improper use of Indian land even though
the tribes could not sue the United States for its failure to collect the sums
allegedly due.8 The Court stated, 'That the United States also had a right to sue
did not necessarily preclude the tribes from bringing their own actions.' Id., at
640, 63 S.Ct. at 790. Accord, Lane v. Pueblo of Santa Rosa, 249 U.S. 110, 39
S.Ct. 185, 63 L.Ed. 504 (1919); Skokomish Indian Tribe v. France, 269 F.2d
555 (C.A. 9th Cir. 1959). Nor does the existence of the Government's power to
sue affect the rights of the individual Indian.9 'A restricted Indian is not without
capacity to sue or to be sued with respect to his affairs, including his restricted
property. * * * Both the act of April 12, 1926 and the decision * * * in
Heckman v. United States * * * recognize capacity in a restricted Indian to sue
or defend actions in his own behalf subject only to the right of the Government
to intervene.' Sadler v. Public Nat. Bank & Trust Co., 172 F.2d 870, 874
(C.A.10th Cir. 1949). And in Choctaw & Chickasaw Nations v. Seitz, 193 F.2d
456, 459 (C.A.10th Cir. 1951), the court stated that Heckman, supra, Lane,
supra, and Candelaria, supra, 'clearly recognized the rights of restricted Indians
and Indian tribes or pueblos to maintain actions with respect to their lands,
although the United States would not be bound by the judgment in such an
action, to which it was not a party, brought by the restricted Indian or an Indian
tribe or pueblo.' In Brown v. Anderson, 61 Okl. 136, 160 P. 724 (1916), the
Oklahoma Supreme Court itself held that Heckman had 'fully answered' the
argument that only the United States as guardian of the Indian could bring a

suit to cancel an improper conveyance of a restricted Indian allotment. The

court held:
7

'Osborne Anderson, the defendant in error, although a full-blood Indian, was a

citizen of the United States and of the state of Oklahoma. No good reason
appears why he should be denied the privilege of appealing to the courts of the
state the same as any other citizen to enforce his rights to property, even though
such property be land upon which restrictions against alienation have been
imposed by an act of Congress.' 61 Okl., at 138139, 160 P., at 726.

See Bell v. Fitzpatrick, 53 Okl. 574, 157 P. 334 (1916); L. Mills, Oklahoma
Indian Land Laws 328 (1924). We agree that the federal restrictions
preventing the Indian from selling or leasing his allotted land without the
consent of a governmental official do not prevent the Indian landowner, like
other property owners, from maintaining suits appropriate to the protection of
his rights.

There remains the question whether the terms of the oil and gas lease or the
regulations promulgated by the Secretary of the Interior to govern those leases
prevent the Indians from seeking judicial relief for an alleged impairment of
their interests under the lease. Respondent argues that the Secretary has such
complete control over the lease that only he can institute the necessary court
action.

10

The leasing of allotted land for mining purposes 'by said allottee' is expressly
authorized by 25 U.S.C. 396. Although the approval of the Secretary is
required, he is not the lessor and he cannot grant the lease on his own
authority.10 The Secretary is authorized to promulgate regulations controlling
the operation and development of the lease and to issue necessary written
instructions to the lessee. Ibid. See generally 25 CFR 172.1 172.33 (1967);
30 CFR 221.1221.67 (1967). The lessee is required to furnish a surety
bond, in an amount satisfactory to the Secretary, guaranteeing compliance with
the terms of the lease, which incorporate the regulations of the Secretary. 25
U.S.C. 396c. The Secretary has the power to inspect the leased premises and
the books and records of the lessee. 25 CFR 172.25 (1967). The Secretary
also has the power to impose such restrictions as to the time for the drilling of
wells or the production from any well 'as in his judgment may be necessary or
proper for the protection of the natural resources of the leased land and in the
interests of the Indian lessor.' 25 CFR 172.24 (1967). The lessee must furnish
the Secretary with a monthly report disclosing all operations conducted on the
lease, 30 CFR 221.60221.65 (1967), and must pay the royalties to the
Secretary who deposits them to the credit of the Indian lessor. 25 CFR

172.14, 172.16 (1967). The lessee agrees to drill wells which the Secretary
determines are necessary to protect the leased land from drainage by another
well on adjoining property. 30 CFR 221.21 (1967). Finally, the lessee is
obligated to prevent the waste of oil and gas and agrees to pay the Indian lessor
the full value of all gas wasted, unless the Secretary determines at the request of
the lessee that the waste was sanctioned by state and federal law. 30 CFR
221.18, 221.35 (1967).
11

While the United States has exercised its supervisory authority over oil and gas
leases in considerable detail, we find nothing in this regulatory scheme which
would preclude petitioners from seeking judicial relief for an alleged violation
of the lease. If the Government does determine that there has been waste in
violation of a lease, it will of course satisfy its trust obligations by filing the
necessary court action. However, there is nothing in the lease or regulations
requiring the Indians to seek administrative action from the Government instead
of instituting legal proceedings on their own. The existence of the power of the
United States to sue upon a violation of the lease no more diminishes the right
of the Indian to maintain an action to protect that lease than the general power
of the United States to safeguard an allotment affected the capacity of the
Indian to protect that allotment. Furthermore, the Bureau of Indian Affairs,
which is the agency of the Department of the Interior charged with fulfilling the
trust obligations of the United States, is faced 'with an almost staggering
problem in attempting to discharge its trust obligations with respect to
thousands upon thousands of scattered Indian allotments. In some cases, the
adequate fulfillment of trust responsibilities on these allotments would
undoubtedly involve administrative costs running many times the income value
of the property.' H.R.Rep. No. 2503, 82d Cong., 2d Sess., 23 (1952).
Recognizing these administrative burdens and realizing that the Indian's right to
sue should not depend on the good judgment or zeal of a government attorney,
the United States has indicated its support of petitioners' position that Indians
have a capacity to sue under the oil and gas lease.11

12

The regulations do empower the Secretary to cancel a lease 'for good cause
upon application of the lessor or lessee, or if at any time the Secretary is
satisfied that the provisions of the lease or of any regulations heretofore or
hereafter prescribed have been violated.' 25 CFR 172.23 (1967). However,
there is no justification for concluding that the severe sanction of cancellation
of the lease is the only relief for all breaches of the lease terms or for any
failure to pay royalties. Both the lessor and the lessee may wish to resolve their
disagreement by the payment of damages and not by the cancellation of a
basically satisfactory lease.

13

Nor is the capacity of the Indian defeated by 6 of the lease, which provides
that the Secretary may cancel the lease 'before restrictions are removed,' and
concludes, 'Provided, That after restrictions are removed the lessor shall have
and be entitled to any available remedy in law or equity for breach of this
contract by the lessee.'12 There is no warrant for implying by negative inference
from this proviso a denial of all remedies otherwise available to the Indian prior
to the removal of the federal restrictions on his power to alienate the land.
Section 6 merely provides that when the federal restrictions on alienation are
terminated, the federal supervision over the lease will likewise come to an end,
without impairing the continuing rights of the Indian. Compare 25 CFR
172.28 (1967).13

14

Respondent's argument that the judgment in its favor should be sustained on

available adequate state procedural grounds is untenable. Since the Oklahoma
Supreme Court's decision rested solely on federal grounds, that court must have
either rejected or failed to reach the asserted state grounds. Furthermore, we
intimate no view on the merits of the case. If the lessee has conformed to all of
the requirements of the federal regulations and has not breached any of the
terms of the lease, the suit may fail. We merely hold that the Indian lessors
have the capacity to maintain an action seeking damages for the alleged breach
of the oil and gas lease. Accordingly, the judgment of the Supreme Court of
Oklahoma is reversed and the cause is remanded for further proceedings not
inconsistent with this opinion. It is so ordered.

15

Reversed and remanded.

16

Mr. Justice MARSHALL took no part in the consideration or decision of this

case.

The Area Director of the Bureau of Indian Affairs approved a contract between
petitioners and an attorney for legal services to be rendered in connection with
this litigation. The Area Director has been delegated the authority to approve
the employment of attorneys for individual Indians who may be compensated
on a quantum meruit basis from restricted trust funds. Section 269 of Order 551
of the Commissioner of Indian Affairs, 16 Fed.Reg. 2939 (1951), as amended,
22 Fed.Reg. 6066 (1957).

The petition also alleged that the waste of natural gas violated 86.3 of the
Oklahoma Oil and Gas Conservation Act. Okl.Stat., Tit. 52, 86.3 (1951). In
response to a motion to require petitioners to elect between or state separately a

cause of action under the lease and one based on tort, the District Court, with
the approval of the parties, struck the alleged violation of the conservation
statute from the petition. After petitioners announced that the petition then
stated only one cause of action which sought recovery for the breach of the
lease, the District Court denied the motion.
3

The lease provides:

'3. In consideration of the foregoing, the lessee hereby agrees:
'(f) Diligence, prevention of waste.To exercise reasonable diligence in
drilling and operating wells for oil and gas on the lands covered hereby, while
such products can be secured in paying quantities; to carry on all operations
hereunder in a good and workmanlike manner in accordance with approved
methods and practice, having due regard for the prevention of waste of oil or
gas developed on the land. * * *'
See 30 CFR 221.18, 221.35 (1967).

The opinion of the Oklahoma Supreme Court is not reported.

Indians are expressly authorized to institute proceedings against the United

States to establish their right to an allotment. 25 U.S.C. 345.

See note following 25 U.S.C. 348. And see 25 U.S.C. 462, which provides:
'The existing periods of trust placed upon any Indian lands and any restriction
on alienation thereof are extended and continued until otherwise directed by
Congress.'

'This national interest is not to be expressed in terms of property, or to be

limited to the assertion of rights incident to the ownership of a reversion or to
the holding of a technical title in trust.' Heckman v. United States, 224 U.S.
413, 437, 32 S.Ct. 424, 431 (1912), quoted with approval in United States v.
Hellard, 322 U.S. 363, 366, 64 S.Ct. 985, 987, 88 L.Ed. 1326 (1944).

Indians of course are now authorized to bring claims against the United States.
See Indian Claims Commission Act, 60 Stat. 1049 (1946), 25 U.S.C. 70
70w. For claims arising after August 13, 1946, see 28 U.S.C. 1505,
conferring jurisdiction on the Court of Claims.

'(T)he rights of restricted Indians and Indian tribes or pueblos to maintain

actions with respect to their lands are clearly recognized, although the United
States might not be bound by a judgment in such an action to which it was not a
party.' Federal Indian Law 336 (1958).

10

A proviso to 396 does give the Secretary the power to offer leases on his own
if the allottee is deceased and the heirs have not been determined or cannot be
found. 25 U.S.C. 396.

11

The Memorandum for the United States as amicus curiae states, at 7:

'In sum, respondent's contention that, until the trusteeship is ended, the Indian
landowners are disabled from maintaining suit for breach of a lease they have
granted of their own property is unsupported in the governing statutes, the
implementing regulations, or the terms of the lease.'

12

Section 6 of the lease provides:

'6. Cancellation and forfeiture.When, in the opinion of the Secretary of the
Interior, there has been a violation of any of the terms and conditions of this
lease before restrictions are removed, the Secretary of the Interior shall have
the right at any time after 30 days notice to the lessee, specifying the terms and
conditions violated, and after a hearing, if the lessee shall so request within 30
days of receipt of notice, to declare this lease null and void, and the lessor shall
then be entitled, and authorized to take immediate possession of the land:
Provided, That after restrictions are removed the lessor shall have and be
entitled to any available remedy in law or equity for breach of this contract by
the lessee.'

13

The regulation dealing with the removal of restrictions avoids the danger of a
negative inference by stating: 'Oil and gas leases * * * on land from all of which
restrictions against alienation have been or shall be removed, even if such leases
contain provisions authorizing supervision by the Department, shall, after such
removal of restrictions against alienation, be operated entirely free from such
supervision, and the authority and power delegated to the Secretary of the
Interior in said leases shall cease. * * *' 25 CFR 172.28 (1967).