INTHE SIJPREME COURT OF THE STATE OF MONTANA

CONTINENTALOIL COMPANY, a corporation, Petitioner

ELKS NATIONAL FOUNDATION, a legal entity; FLOYD R. YOUNG;CHAD RANDALL YOUNG by his guardian SHERRYL. YOUNG; JOSHUALEEYOUNG, by his guardian SHERRY L. YOUNG,MICHAEL EDWINMAXWELL,by his guardian SHIRLEYG. JOHNSON;CORINNANELL MAXWELL,by her guardian SHIRLEY G JOHNSON; LOIS E. LaRUE RIGGINS; SHERRYL. YOUNG; JAMES BYRD; JOSEPH EDWINMAXERLL, JR.; BETTYWILSON;MARY JO BYRD; THOMAS 

### A. LARSON and GENE HUNTLEY, Respondents

ORIGINALPROCEEDING:
COUNSELOF RECORD: For Petitioner: Chris Mangen, Jr. argued, Crowley, Haughey, Hanson, Toole & Dietrich; Billings,Montana
For Respondents: Gene Huntley argued, Baker,Montana
JamesL. Sandal1 forAmicus Curiae Frank A. Gunnip
t- and Robert P. Schwinn, Billings,Montana 

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# 4: w.J -l a Submitted: December 13, 1988 E_ L.3 LLJ Decided:January 25, 1989

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### - ' "EferkMr. Justice Fred J. Weber delivered the Opinion of the Court.

This is an application for a writ of supervisory control under Rule 17, M.R.App.P. It follows a summary judgment by the District Court for the Sixteenth Judicial District, Fall-onCounty,which adjudicated the ownership of theworking interest in an oil and gas lease. We accept supervisory control and reverse the judgmentof the DistrictCourt. The issue is whether this Court should issue a writ of supervisory control to determine the extent of Continental. Oil Company's ownership in the oil and gas lease. This case was before the Court previously as Gunnip 17. Continental Oil Co. (Mont. 1986), 727 P.2d 1315, 43 St.Rep. 1605. That opinion sets forth the complicated history of the ownership of the working interest in the N4 of the NP3 of Section 8, Township 7 North, Range 60 East. In all discussion in this opinion,we are referringto that working interest. In the Gunnip opinion, this Court indicated the ownership of theworking interest,as established inprevious judgments relating to the property, as follows: half of the NjNW$ in

### H.W. McDonald, subjectto a 1962 ratification agreement with Continental Oil Company (Continental), and the otherhalf of theNjNW$ in Frank Gunnip. Gunnip, 727 P.2d at 1316. The Court remanded the case to District Court for joinder of essential parties and "to assess Continental's interest considering potential applicationof adversepossession, waiver and estoppel." Gunnip, 727 P.2d at 1317. Theplaintiffs in thepresent case trace their ownership in the NqNWt to conveyances from H.W. McDonald subsequent to the 1962 ratification agreement. The effect of the 1962 ratification agreement was argued on remand. The District Court ruled that the intent of the parties to the ratification was that Mr. McDonald conveyed to Continental one halfofhis interest in theNiNW$. Itruled that the ownership of the N$NW$ is as follows: one half in Frank Gunnip and his assigns, one fourth in pl-aintiffs,and one fourth in Continental. Continental filed a notice of appeal towhich plaintiffs objected because certification had not been obtained from the lower court as required by Rule 54(b)

### , M.R.Civ.P. We allowed an opportunity for the lower court to certi'y its partial summary judgment, hut the court declined to do so. Continental now asks this Court to exercise its power of supervisory controol. At oral argument, counsel for plaintiffs ioined in the request that this Court determine the interestof Continental in theNiNW$. Frank Gunnip and his assign Robert Schwinn, who were formerly plaintiffs, have obtained separate counsel and have been redesignated by the lower court as defendants. They have filed a third-party complaint below, asserting their right to one half of the working interest in the NiNW$. In their brief to this Court, they take no position on the application for supervisory control but ask that their

onehalf interest in the working interest 

### in the NBNW~be acknowledged.

Should this Court issue a writ of supervisory control to determine the extent of Continental's ownership in the 

### oil and gas lease? Our caselawhas set forth the standard tobe employed in determining whether supervisory control under Rule 17, M.R.App.P., is warranted. Supervisory control is proper to control the course of litigation when the lower court has made a mistake of law or willfully disregarded the law so that a gross injustice is done and there is no adequate remedy by appeal; also, to prevent extended and needlesslitigation. State Highway Com'n. v. DistrictCt., Thirteenth J.D. (1972),160Mont. 35, 42-43,499 P.2d 122811232- As the opinion in Gunnip stated, the 1962 ratification agreement signed by Mr. McDonald provided that:



# . 

# . . the undersigned, H.W. McDonald, does hereby ratify, adopt and confirm said assignment, in all things with the same force and effect as if the undersigned had been named the assignor therein and had duly executed and delivered said assignment to ContinentalOil Company. For the same consideration, the undersigned does hereby transfer, assign, set over and convey unto Continental Oil Company an undivided one-half 

### ($1 interest in the oil and gas lease above described

# .. . Gunnip, 727 P.2d at 1316. The plaintiffs arguehere, as they did before the District Court, that the ratification is ambiguous so that a court must look beyond the four corners of the document to interpret it. The Courtwas notpersuaded by that argument in Gunnip,nor is itnow. We stated:
There remain unresolved issues of material fact regarding the interest of Continental. Although McDonald conveyed an "undivided one-half interest" in the Lease under the ratification agreement, Continental admits in its brief that it did not treat its 50% interest in theN$ of theNWi as being derived solely from McDonald until judqment no. 4062 was entered. In 1964 McDonald assigned undivided intereststo Huntley, Iverson,and Larson. Huntley, Iverson and Larson have claimed under this assignment adverse to the interest Continental now claims under the ratification agreement. A trial must be held to assess Continental's interest consideringpotential application of adversepossession, waiver and estoppel. Gunnip, 727P.2d at 1317. In the above quotation, this Court recognized that the ratification conveyed an "undivided one-half interest" in the lease. Then, as now, we Found no ambiguity in the

### ratification agreement. We remanded so that adverse possession, waiver, and estoppel could be considered as theories under which Continental might have subsequently lost or forfeited 

### anyportion of its onehalf interest. The District Court ignored this Court's opinion and reconsidered the effect of the ratification agreement. We therefore grant supervisory control. We have considered allmaterials and evidence submitted by plaintiffs, including copies of certain oil division ordersand correspondencebetween Continentaland plaintiffs' attorney. We have considered whether those might support a theory of adverse possession, waiver, or estoppel against Continental. However, we find nothing to indicate that Continental has relinquished its claim to any portion of one half of the working interest in the NjNWa. The documents reflect Continental's mistaken reliance,at that time,on the validity of interests claimed by Vernon Eide and J. 

### Von DeLinde. This ended after the 1970 

### judgment voiding the conveyance toMr. Eide and Mr. Von DeLinde andvesting ownership in Gunnip. See Gunnip, 727 

### P.2d at 1316. 

### Plaintiffs contend that the documents demonstrate that Continental relied upon a conveyance to it from Mr. Eide and Mr. Von DeLinde. We do not accept that contention. The mere statement in the letters and division order of a supposed interest held by Eide and Von DeLinde is not enough to establish a loss of the interest conveyed to Continental from H.W. 

### McDonald. The documents also indicate that Mr. Huntley and two otherMcDonald assignsheld interests in the lease. They do not name the grantor of any of the interests, however. The documents uniformly show Continental' claim to one half of the working interest. We conclude that plaintiffs have failed topresent substantialevidence to support a theory of adverse possession,waiver, or 

### estoppel against Continental.We therefore reverse the District Court. We hold that Continental owns an undivided one half interest in the working interest in the N3NWI. We further hold that Mr. Gunnip and his assigns own the remaining half of the working interest in the N4NWJ. We remand to the District Court for entry of judgment establishing the ownership of the working interest in the NiNWJ and for such further proceedings as are necessary in conformitywith this opinion.

We Concur:

Chief ~usticed

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# ,,Justices

for Justice X.C. Gulbrandson.

Retired Chief6~ustice Frank I. Haswell sitti-ngfor ,Justice ,John C. Sheehy.