Judicial Committee of the Privy Council –  90 L.J.P.C. 33
Aboriginals cannot surrender their land rights to anyone other than the Crown. The federal government has the power to accept the surrender, but once completed, the province becomes titular owner of the lands pursuant to s. 91(24) of the Constitution Act, 1867.
After the surrender of the lands by the Abenakis, was the land title transferred to Canada or to the province of Quebec?
After a surrender of lands by Indians, the land title is transferred to the province and not to the federal government (unanimous decision).
Between: Quebec and Star Chrome Mining Co.
And: Canada and Rosalie Thompson
In 1853, by way of Order-in-Council, certain lands in the township of Coleraine in the county of Mégantic were secured on behalf of the Indian tribes of Lower Canada. The lands in question for the purposes of this case were set aside for the benefit of the Abenakis of Bécancour. In 1882, the Abenakis surrendered the tracts of land to Her Majesty the Queen by Order-in-Council.
In 1887, the Dominion Government signed over the lands by letters patent to Cyrice Tetu, whose interest in them passed on to Dame Caroline Tetu upon his death. In 1907, the lands passed through the hands of several owners only to be sold to the Star Chrome Mining Company Ltd by Dame Rosalie Thompson.
In 1909, the company initiated an action to annul the sale and obtain reimbursement of the cost of purchase with damages against the vendor. The action’s basis was that the vendor had no title for the land as it was held by the Crown in the right of the Province of Quebec.
Quebec and Star Chrome Mining Company: The surrender of property to Cyrice Tetu was “null and void, on the ground that the lands which the grant professed to dispose of were the property of the Crown in the right of Quebec”.
At Confederation, the title was bestowed upon the Crown, subject to an interest held in trust for the benefit of the Indians, which constituted, at most, “a personal and usufructuary right dependent upon the goodwill of the Crown.” (St. Catherine’s Milling Co. v. The Queen,  14 A.C. 48, 54). After the 1882 surrender, the lands were freed from their Indian interest, and their full beneficial interest was transferred to Quebec.
Canada and Rosalie Thompson: The surrender to Cyrice Tetu was valid.
The title, both legal and beneficial, was held in trust for the Indians. According to the Act to authorize the setting apart of lands for the use of certain Indian tribes in Lower Canada (1850) and the Act for the better protection of the Lands and Property of the Indians in Lower Canada (1851), the lands held in trust for the Indians created a beneficial ownership by the Province of Canada. Since the lands have an Indian interest, they belong to the Dominion of Canada according to s. 91 (24) of the Constitution Act, 1867.
Superior Court of Quebec (1917): Rejected the intervention of Quebec
Court of King’s Bench (1917): Rejected the intervention of Quebec
Viscount Haldane, Viscount Cave, Lord Dunedin, Duff
The terms of the Act of 1850 acknowledge that Indians have a certain inherent right to enjoy the lands set aside by the Crown for their usage (the reserve).
However, that right is a usufructuary right only, and a personal right that could be surrendered to none but the Crown. The Dominion had the authority to accept the surrender from the Abenakis since it was in charge of managing and administering the Abenakis’ reserve. Nevertheless, after the surrender, it cannot appropriate for itself the new Crown lands which are the sole propriety of Quebec, according to s. 109.
Thus, the title issued to Cyrice Tetu and now held by Star Chrome Mining Co. is null and void. The vendor, Thompson, being without a valid title at the time of the sale, Star Chrome Mining Co. has the right to ask for a rescission.
The Court reaffirmed the principle of land surrenders established in St. Catherine’s Milling, almost a century earlier, through its application to resolve this new issue raised by this case (Smith, 1983).
However, the Smith ruling established once and for all that an absolute surrender necessarily implies the extinction of the rights of the Crown set out by s. 91(24) of the Constitution Act, 1867 (Isaac, 2004). The Star Chrome case later served to support the arguments of the Court.
Confirmed by Smith v. The Queen,  1 S.C.R. 554
Isaac Thomas. 2004. Aboriginal Law: commentary, cases and materials, 3rd ed. Saskatoon: Purich Pub.