NO. 92-113 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1992 

JANE S. NORBECK, Trustee of the 

JANE NORBECK Trust dated November 20, 1963, 

Plaintiff, Respondent and Cross-Appellant, 

-vsMRS. M. H. CRAWFORD and MR. M. H. CRAWFORD, her husband, 

if any, and other heirs, devisees, legatees, creditors, 

administrators, executors, and assigns of any of said 

defendants, if they be deceased: 

known or unknown, 

and any and all persons 

title, 

claiming or who might claim any right, 

estate or interest in or lien or encumbrance upon 

the real property situated in the County of Fallon, 

State of Montana, described as 25% of the net proceeds 

derived from the production as reserved by George Norbeck 

in operating agreement with Fidelity Gas Company included 

in and a part of U.S. Oil and Gas Lease prospecting permit, 

Billings Serial #021056 as to NE1/4, Section 12, Twp. 8N, 

Rge 59E of M.P.M., Fallon County, Montana or any thereof 

adverse to Plaintiff's title whether such claim be present 

or contingent including any claim or possible claim of dower, 

inchoate or accrued, 

Defendants, Appellants, and Cross-Respondents. 

APPEAL FROM: District Court of the Sixteenth Judicial District, 

In and for the County of Fallon, 

The Honorable Joe L. Hegel, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Charles J. Peterson, Mackoff, Kellogg, Kirby & 

Kloster, Beach, North Dakota 

For Respondent: 

Chris Mangen, Jr., Crowley, Haughey, Hanson, Toole 

& Dietrich, Billings, Montana 

_ 4; ; 

Submitted on Briefs: July 23, 1992 
Justice R. C. McDonough delivered the Opinion of the Court. 

Mrs. M.H. Crawford, et al., appeals from a judgment of the 

Sixteenth Judicial District Court, Fallon CoUnty. We affirm. 

The sole issue on appeal is: 

Whether the District Court erred in granting the disputed 25 

percent interest in a federal oil and gas lease to Jane S. Norbeck, 

Trustee of the Jane Norbeck Trust, subject however to 39/40ths of 

such 25 percent interest being vested in Mrs. M.H. Crawford, et 

al., upon approval of the Department of the Interior. 

In 1934, George Norbeck (Norbeck) obtained federal lease, 

021056 (b) , from the United States Department of Interior. The 

lease contained a fixed twenty year term and granted the lessee 

right of renewal upon expiration. The lease also contained a 

provision barring assignment without consent of the Secretary of 

the Interior through the land office. 

Norbeck entered into an operating agreement with Fidelity Gas 

Company. He retained record title ownership of the lease, as 

lessee, with 25 percent of the net proceeds of production. Norbeck 

appointed Fidelity Gas Company as his attorney-in-fact to obtain 

renewal leases on his behalf. Subsequently, Fidelity Gas Company 

assigned the operating rights in the deep formations to Shell Oil 

Company. 

In 1935, Norbeck made an assignment of the 25 percent interest 

to Mrs. M.H. Crawford. This assignment was rejected by the United 

States Land Office because Mrs. Crawford did not pay the required 

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lease bond, or establish the necessary qualifications to own an 

interest in the lease. Mrs. Crawford did not pay any delay 

rentals. After the assignment, Mrs. Crawford had the assignment 

filed with the county clerk and recorder. Thereafter, Mrs. 

Crawford took no action in regard to the lease. 

Fidelity Gas applied for a renewal lease in 1954 on behalf of 

Mrs. Crawford. The land office rejected the renewal because 

Fidelity Gas did not have authority to act on behalf of Mrs. 

Crawford, and the land office did not recognize Mrs. Crawford as a 

lessee. Fidelity then applied for a renewal lease as attorney-infact for Norbeck. The land office accepted this application and 

issued a renewal to Norbeck. In 1964 Fidelity applied for the 

second renewal as attorney-in-fact for Norbeck, and the renewal was 

issued. The second renewal lease was put on producing status in 

1968. Since then, some $420,000 in production payments have been 

allocated to the 25 percent interest. 

On October 28, 1968, the land office notified "heirs of George 

Norbeck" that under federal regulations they had to establish their 

succession to his interest in the lease. On August 18, 1987, the 

Bureau of Land Management (BLM), the successor to the land office, 

notified the Norbeck heirs that it recognized their interest in the 

lease. 

The Norbeck heirs transferred all of their interest in the 

lease to the Jane Norbeck Trust, Julius A. Bernard, Trustee. 

Subsequently, Jane S. Norbeck took over as trustee (Norbeck 
Trustee). On September 29, 1988, Shell Oil notified the trustee 

that Shell had completed its review of the claim to the interest 

but would not distribute the proceeds without a quiet title action 

being completed. 

On October 22, 1990, the Norbeck Trustee began a quiet title 

action before the District Court. Efforts were made to locate Mrs. 

Crawford, but no response was forthcoming. A default was taken 

against Mrs. M. H. Crawford. The District Court quieted title to 

Jane S. Norbeck, Trustee, on December 7, 1990. 

Subsequently, the heirs of Mrs. M.H. Crawford (the Crawford 

heirs) surfaced and filed a motion for relief from judgment. The 

District Court vacated the default and judgment on June 4, 1991. 

The Crawford heirs sought to quiet their title to 39/40ths of the 

disputed interest. Jane S. Norbeck, Trustee, filed a motion for 

summary judgment. In response the Crawford heirs moved for partial 

summary judgment. 

The District Court, on January 17, 1992, ruled that Jane S. 

Norbeck, Trustee, owned all the allocated production proceeds. 

However, the District Court ruled the Crawford heirs could apply to 

the BLM for approval of the previously rejected assignment. Should 

the assignment be approved, the Crawford heirs would own 39/40ths 

of the disputed interest and the proceeds of production would be 

allocated to them after the first day of the month following 

application for approval. This appeal followed. 

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Our scope of reviewing motions for summary judgment is the 

same as the trial court and is a question of law. Summary judgment 

is granted only if no genuine issue of material fact exists. 

The District Court found that federal oil and gas leases are 

governed by the Mineral Leasing Act of 1920, P.L. No. 146, 41 Stat. 

437 (1920), as codified in 30 U.S.C. Sec. 5, 181 et seq. The 

original statute provided: "[N]o lease issued under the authority 

of this Act shall be assigned or sublet, except with the consent of 

the Secretary of the Interior." 

30 U.S.C. Sec. 187a (1990) provides: 

[A]ny oil or gas lease issued under the authority of this 

Act may be assigned . . ., subject to final approval by 

the Secretary . . to any person or persons qualified 

to own a lease unddr this Act, and any assignment or 

sublease shall take effect as of the first day of the 

lease month following the date of filing in the proper 

land office of three original executed counterparts 

thereof, together with any required bond and proof of 

qualification under the Act of the assignee or subleasee 

to take or hold such lease or interest therein. . . . 

The District Court in light of 30 U.S.C. 187a, ruled the Crawford 

heirs would own 39/40ths of the disputed interest upon the approval 

of the assignment by the BLM. 

The case of Oasis Oil Co. v. Bell Oil & Gas Co. (W-D. Okla. 

1952), 106 F.Supp 954, followed 30 U.S.C. § 187a, and held that 

Oasis Oil Company (the assignor) was the sole record holder of the 

lease and was entitled to all of the oil runs from the well on the 

lease. Oasis at 957. In Q&is, the assignee, Fish, failed to pay 

the requested fee, and provided insufficient information to the 

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Department of Interior which refused to approve the assignment. 

Thus, the assignment did not convey any interest in the lease under 

the statute until the date the Secretary of Interior approved the 

lease. 

The Crawford heirs rely on Gibbons v. Pan American Petroleum 

Corporation (10th Cir. 1958), 262 F.2d 852, for the proposition 

that neither Norbeck nor his heirs were obligated under the lease 

after the assignment. However, this proposition is contrary to the 

facts before us. The Department of Interior viewed Norbeck as the 

record owner of the lease. The renewals were made and accepted in 

his name. A renewal submitted on behalf of Mrs. M.H. Crawford was 

rejected because the assignment had never been approved. Delay 

rentals became the responsibility of Norbeck, whether he paid them 

or not. In Gibbons, the Tenth Circuit stated that Gibbons's 

failure to submit the assignment for approval could not destroy the 

obligation of an assignee under the lease. Gibbons at 854. Thus 

Gibbons rests on the fact that Gibbons did not submit the 

assignment for approval. Here, Mrs. M.H. Crawford applied to the 

land office for approval of the assignment and it was rejected. 

The material facts are not in dispute. Norbeck made an 

assignment to Mrs. Crawford but she failed to perfect the 

assignment with the Department of Interior pursuant to the language 

of the original lease and 30 U.S.C. 5 187a. Later attempts were 

made to have Mrs. Crawford pay the rentals but without success. As 

a result the obligations under the lease remained with Norbeck. 

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Neither the assignor nor assignee, or their heirs, acted relative 

to any rights they had until awakened by Shell Oil. The District 

Court ordered the existing proceeds of the 25 percent interest paid 

to the Norbeck heirs, however by its order it allowed the Crawford 

heirs the opportunity to perfect the assignment by seeking approval 

of the Secretary of Interior under 30 U.S.C. 5 187a. 

Based on the evidence presented in the record, we agree with 

the determination of the District Court and affirm the District 

Court. 

We Concur: 

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