Supreme Court of Canada –  S.C.R. 210
According to the Court, Indians cannot sell lands reserved for their benefit to anyone except to the Crown, and that includes leasing. Indians cannot lease their land directly, without the Crown of Canada as an intermediate.
Can a band lease part of its reserve to a non-Aboriginal or is the act null and void in initio?
No, the band cannot lease part of its reserve (unanimous decision).
Between: Easterbrooke (heir to Solomon Youmans Chesley)
And: the Crown of Canada
In 1821, the chiefs of the Mohawk Indians of St. Regis reserve, now the Mohawks of Akwesasne, leased on their behalf and that of the band an area of 200 acres known as Chesley Farm to a non-Indian, Solomon Youmans Chesley and his heirs for a term of 99 years.
Until 1875, the rent was paid directly to the band. After that year, the Department of Indian Affairs received the rent for the benefit of the Indians and transferred the money to the St. Regis’ band. The rent was disbursed each year up until March 10, 1920
In 1920, the Department of Indian Affairs stopped tolerating the farm’s presence inside the St. Regis reserve and gave the appellant an eviction notice. The appellant refuse to leave the possession in question.
In 1921, the case was transferred to the Attorney-General of Canada seeks to recover the said land on behalf of the Crown.
The Crown of Canada: No evidence had been brought before the court proving that the Superintendent of Indian Affairs or the local government had been given notice of the contract. Since the Royal Proclamation, 1763 precluded private parties from purchasing reserve land, the Crown’s main argument is that the lease was void. In addition, an Order in Council of the Lieutenant-Governor of Upper Canada passed in 1802 established that no lease of Crown lands under the authority of Indian Nations would be allowed.
Easterbrooke: The lease was registered in the Book of the Department of Indian Affairs and endorsed by a government official in September 1875. Subsequently, the rent was paid to the Department for the benefit of Indians, thereby confirming the transaction. Also, the appellant maintains that the Royal Proclamation, 1763 did not affect the contract, since the 200 acres were not sold, but leased.
Exchequer Court of Canada (1929): The lease was void since the chiefs had no authority to contract with the appellant’s ancestor. Hence, the Crown was entitled to repossess the farm land and $400 in damages per year from the date of the eviction notice until the moment the appellant surrendered the premises. Easterbrooke’s claim for compensation for the improvements he made is denied.
Anglin, Duff, Newcombe, Lamont, Cannon
Concerning the validity of the lease, the Court decided that the Crown was in right to be in possession of the land. The Crown could take possession of the land. On the basis of the St. Catherines Milling decision, justice Newcombe found that the band did not have the authority to lease part of its reserve. Also, the lease was breach of the Royal Proclamation, 1763, which prohibited Indians to sell their lands other than to the British Crown, and of ensuing enactments, the 1802 Order-in-Council of Lieutenant-Governor of Upper Canada and the Indian Act. As for the acceptance of the rent money by the Department of Indian Affairs, it could not be interpreted as a validation of the lease since the act was prohibited from the start.
For the claim concerning Easterbrooke’s compensation for improvements made, he had no right to it. The Crown was not held to liability in virtue of any statutory or contractual obligations, nor did it make any representations to that effect. Accordingly, the Court decided that the conclusions of the Exchequer Court should be sustained.
The Indian Act allows bands to “designate” lands to remain part of the reserve after they have been surrender to the Crown. The same legislation also allows for exceptions to the prohibition of selling reserve lands.
For example, the Minister of Indian Affairs, with the band’s consent, may issue a permit with a one-year term to a non-Indian to occupy or reside on part of a reserve. He can also lease an Indian’s stake on his behalf. Reserve lands can be further alienated for public purposes, to a surviving spouse, and for agricultural purposes.
Guerin v. R.,  2 S.C.R. 335
Musqueam Indian Band v. Glass,  2 S.C.R. 633
Opetchesaht Indian Band v. Canada,  2 S.C.R. 119