Case Name: CONTINENTAL OIL CO. et al. v. OSAGE OIL & REFINING CO. et al.
Court: United States Court of Appeals for the Tenth Circuit
Jurisdiction: United States
Decision Date: 1934-02-03
Citations: 69 F.2d 19
Docket Number: No. 727
Parties: CONTINENTAL OIL CO. et al. v. OSAGE OIL & REFINING CO. et al.
Judges: 
Reporter: Federal Reporter 2d Series
Volume: 69
Pages: 19–32

Head Matter:
CONTINENTAL OIL CO. et al. v. OSAGE OIL & REFINING CO. et al.
No. 727.
Circuit Court of Appeals, Tenth Circuit.
Feb. 3, 1934.
McDERMOTT, Circuit Judge, dissenting.
See, also, 57 F.(2d) 527.
Chester I. Long, of Wichita, Kan., and D. A. Richardson, of Oklahoma City, Okl. (Robert F. Armstrong and Wm. H. Zwick, both of Ponca City, Okl., and Ray S. Fellows, of Tulsa, Okl., on the brief), for appellants.
W. F. Wilson, of Oklahoma City, Okl. (J. E. Whitehead, of Dallas, Tex., and Wilson, Wilson & Owens, of Oklahoma City, Okl., on the brief), for appellees.
Before PHILLIPS and McDERMOTT, Circuit Judges, and KENNEDY, District Judge.
Rehearing denied March 13, 1934; supplemental petition for rehearing denied March 26, 1934.

Opinion:
PHILLIPS, Circuit Judge.
On August 27, 1918, the Secretary of Interior approved a departmental oil. lease from the Osage Tribe of Indians to the Osage Oil & Refining Company. This lease was for a term of five years from the date of approval, and "so long thereafter as oil is found in paying quantities." It has been the subject of much litigation. For a history of such litigation up to November 8, 1928, see Axelrod v. Osage O. & R. Co. (C. C. A. 8) 29 F.(2d) 712.
The original decree in the instant case was entered on April 29, 1927. It was affirmed by the Eighth Circuit in Axelrod v. Osage O. & R. Co., supra. The mandate was filed January 16, 1929. On February 2, 1929, the Continental Company filed a motion to modify the decree. On June 24, 1929, the trial court entered an order modifying the decree. This order was set aside by this court in Osage O. & R. Co. v. Continental Oil Co., 34 F.(2d) 585, 589. In our opinion .in that case we said in part:
"It is our opinion that the only power possessed by the United States District Court for the Northern District of Oklahoma over the decree of April 29, 1927, affirmed by the Circuit Court of Appeals for the Eighth Circuit, is the power to enforce its execution and it should exercise such power unless the Continental Company, within a reasonable time thereafter, obtains leave from such United States District Court to file a supplemental bill setting up facts which, in the judgment of such court, entitles the Continental Company to be relieved from the duty enjoined on it by the decree of April 29, 1927, to purchase a one-half interest in the lease. In which event, issues should be made up and that cause regularly heard and disposed of."
This is an appeal from an order denying a second application for leave to file a supplemental bill. The facts disclosed by the verified bill and exhibits thereto attached, tendered with such application and in decisions upon prior appeals in this cause, are these:
The obligation imposed by the original decree on the Continental Oil Company of Maine to purchase and pay for a one-half interest in the lease, was conditional. The decree in part provided:
"It is further ordered, adjudged and decreed that the plaintiff (Osage Company) shall discharge all liens appearing of record in the office of the County Clerk of Osage County, Oklahoma, and in the office of the Osage Indian Agency that affect or may be a charge against the above leasehold estate and shall tender and deliver to the Continental Oil Company full, complete and valid title to an undivided one-half interest in said lease in good standing with the Osage Indian Agency, and the Secretary of the Interior and free and clear of any and all liens and encumbrances whatsoever, and if such title cannot be given by plaintiff to The Continental Oil Company within thirty days from the time this decree becomes a finality, then the Continental Oil Company shall thereupon and forthwith be entitled to the return to it of the $50,000.00 herein ordered deposited with the clerk of this court and
The Continental Oil Company shall then surrender to plaintiff any claim to said lease and shall be relieved of any further liability whatsoever to said plaintiff." (Italics ours.)
Pursuant to the direction of the Commis sioner of Indian Affairs in Ms letters of May 8 and 20, 1929, the superintendent of the Osage Indian Agency, after notice to the interested parties, held a hearing with respect to such lease on dune 26, 1929.
On June 27, 1920, the Continental Oil Company, a Maine corporation, assigned, conveyed, and transferred all of its property to the Continental Oil Company, a Delaware corporation.
On July 15, 1929, the superintendent made a report to the Commissioner of Indian Affairs on such hearing, in which he found that, no oil had been produced on the lease from April, .1922, to August 27, 3923, called attention to his report of February 9, 1929, listing' terminated leases and showing such lease to have expired on October 33, 1928, and recommended that the lease he held to have terminated on the latter date.
On September 30, 192-9, the trial court entered an order setting aside its order of June 21, 1929. On the same date the Continental Company of Delaware filed in this cause, in the trial court, an application for leave to file a supplemental bill.
On October 11, 1929, the trial court made an order in which it directed the Continental Company of Delaware to accept assignments of an undivided one-half interest in such lease from the Osage Company to the Continental Company of Maine, and within 15 days after the delivery of such assignments by the Osage Company to present them to the Secretary of Interior for approval, all, to ho without prejudice to the rights of the Continental Company of Delaware to present its application to file a supplemental hill and assert all matters pertaining to the alleged invalidity of such lease.
On December 6, 1929, the superintendent of the Osage Indian Agency made a further report to the Commissioner of Indian Affairs, and accompanied it with a report to Mm made by William Ash Waid, a IJ. S. Oil and Gas Inspector, under date of November 26, 1929. The report of the inspector stated that no oil or gas was being produced from said lease at the end of the five-year period.
On February 12 and 13, 1930, a hearing was had before the Commissioner of Indian Affairs in the matter of the approval of the assignments from the Osage Company to the Continental Company, of which the Osage Company had notice, and in which it participated.
On February 25, 1930, the Commissioner of Indian Affairs reported to the Secretary of Interior that there had been no production on the lease during the five-year period after April, 1922, and that the lease had expired hv its own terms, and recommended that the assignments be disapproved. This recommendation was approved on February 26, 1930, by the first assistant Secretary of Interior.
On March 8, 1930, the Osage Company brought a proceeding in the Supreme Court of the District of Columbia to secure a writ of mandamus directing the Secretary of Interior to approve such assignments.
The amended answer of the Secretary of Interior to the petition in mandamus in part states:
"He admits the bringing in by plaintiff (Osage Company) on or about May 4, 3923, of an oil well from which plaintiff ran only 421.88 barrels of oil up to and ineluding the month of April, 1922, when production ceased and plaintiff apparently abandoned said premises. Thereafter no further interest was manifested by plaintiff in said leased premises. Requests of the Superintendent of the Osage Agency, in the meantime, that overdue accrued rentals be paid by plaintiff on this and other leases, and that this well be 'plugged in' were without response from plaintiff and then, in a reasonable pei'iod following May 17, 1924, after notices of termination because of non-production had been sent to all record owners of said lease, including plaintiff, under dates of August 30, 1923, January 5, and May 17, 1924, the lease was noted on the records of the Superintendent of the Osage Agency as having expired because of non-production. Abandonment by plaintiff was further evidenced by reports from the chief oil and gas inspector concerning that period that no work was being performed on the lease and that pipes had rusted out and that grass had grown up through the derrick floor. S> #• *
"The decision of the Secretary of the Interior herein was the decision of a question of fact, to wit, that the lessee plaintiff, had ceased producing either oil or gas in paying quantities under its said lease; that 'after April 22 the lease was wilfully neglected if not completely and intentionally abandoned' by plaintiff; that the lease had expired by limitation.
"The defendant says that subsequent to August 26, 1923, and long before the filing of the petition in this ca.se, it was a fact that the oil well upon the land in question had not been operated with regularity, and that at such times as it was operated it yielded only about one barrel of oil a day.
"The defendant says that subsequent to August 26, 1923, and long prior to the filing of the petition in this ease, it was a fact that such royalty as was paid upon the oil produced from the land in question did not afford a fair and reasonable compensation to the Osage Indian Tribe for the use of its land. And it was a fact that oil no longer was found upon the land in 'paying quantities' to either the lessor or the lessee.
"Therefore said lease did not exist at the time the petition in this ease was filed and does not exist at this time and the plaintiff has no right to he awarded a writ of mandamus to require the defendant to reinstate the same."
The Supreme Court of the District of Columbia sustained a demurrer to such amended answer, and on April 18, 1931, ordered that a writ of mandamus he issued directing the Secretary of Interior to approve such assignments.
On November 9, 1931, the Court of Appeals of the District of Columbia reversed the judgment of the Supreme Court in the man-damns proceedings. See Wilbur v. United States, 60 App. D. C. 326, 54 F.(2d) 437, 438. We set out the pertinent portions of the opinion therein in note.
The supplemental bill tendered with the •application filed by the Continental Company of Delaware herein, on September 30, 1929, alleged that- the Osage Company had neglected to operate the lease pending the appeal from the original decree, as required by such decree; that by reason thereof the lease had ceased to produce oil in paying quantities and had expired according to its terms; that the Secretary of Interior had declined to approve the assignments, and that the Osage Company had failed to tender a good title. On April 14,1931, the trial court denied the Continental Company of Delaware leave to file such supplemental bill. This order was affirmed by this court in. Continental Oil Co. v. Osage O. & R. Co., 57 F. (2d) 527, in which we held that it was the duty of the Continental Company of Maine to perform the decree of April 29, 1927, and that it was precluded from setting up the termination of the lease, caused by its failure to operate it after that date, and the re fusal of the Secretary of Interior to approve the assignments on account thereof.
On July 16, 1932, the Continental Company of Maine and the Continental Company of Delaware filed a second application for leave to file a "supplemental bill in the nature of a hill of review." The bill tendered with such application, after stating the jurisdictional facts, alleged: That about June 27, 1929, tho Continental Company of Maine transferred, assigned, and conveyed all of its property, assets, rights, and ehoses in action to the Continental Company of Delaware ; that the Continental Company of Delaware was made a party to this action by the order d£ October 11, 1929, and was required to perform, in lieu of the Continental Company of Maine, the acts and things required of the latter by the decree of April 29, 1927; that the decree of April 29, 1927, adjudged that the Continental Company of Maine should purchase from the Osage Company an undivided one-half interest in such lease upon the condition that the Osage Company should tender and deliver to the Continental Company of Maine full, complete a,nd valid title to an undivided one-half interest in such lease, in good standing with tho Osage Indian Agency and the Secretary of Interior, and adjudged that if good title could not be given within thirty days from tho date the decree became a finality, the Continental Company of Maine should be entitled to have returned to it the $50,000 deposited with the clerk of the court by the Continental Company of Maine; that such lease was dated July 22, 1918, and was for a term of five years from the date of its approval, August 27, 1918, and as long thereafter as oil should be found in paying quantities thereon.
The bill further alleged that on June 26, 1929, pursuant to directions from the Commissioner of Indian Affairs, the superintendent of the Osage Indian Agency held a hearing upon the question of whether such lease had expired by its own terms; that tho Osage Company had notice of such hearing and was present at and participated therein; that the superintendent found, and on December 6, 1929, reported to the Commissioner of Indian Affairs, that no oil had been produced from such lease by the Osage Company after the five-year period, and that such lease had expired and terminated by its own terms; that thereafter the Commissioner of Indian Affairs held a hearing, of which tho Osage Company had notice and at which it appeared and participated, on whether such lease had expired and on the question of approval of such assignments, and that the Commissioner of Indian Affairs on February 25, 1930, reported to the Secretary of Interior that such lease had expired by its own terms in 1923, and recommended that such assignments be not approved; that on February 26, 1930, the Secretary of Interior, on the evidence produced before such superintendent and Commissioner, and the findings made by them, found and held that such lease had expired by its own terms at the end of the definite term in 1923, and refused to approve such assignments.
The bill also alleged the proceedings in the mandamus action in the District of Columbia, and particularly the decision of the Court of Appeals of the District of Columbia, and its judgment and mandate to the Supreme Court of the District of Columbia.
The trial court denied leave to file such supplemental bill.
Where a lease is for a definite term and "so long thereafter as oil is found in paying' quantities," the lease expires by its own terms at tho end of such term if the lessee is not then producing oil therefrom in paying quantifies, except in cases where he is preented from so doing by an act of the lessor. Union Gas & Oil Co. v. Adkins (C. C. A. 6) 278 F. 854; Anthis v. Sullivan Oil & Gas Co., 83 Okl. 86, 203 P. 187; Perkins v. Sanders, 109 Kan. 372, 198 P. 954; Collins v. Mt. Pleasant O. & G. Co., 85 Kan. 483, 118 P. 54, 38 L. R. A. (N. S.) 134; Baldwin v. Blue Stem O. Co., 106 Kan. 848, 189 P. 920; Chaney v. Ohio & I. Oil Co., 32 Ind. App. 193, 69 N. E. 477. See, also, note 43 L. R. A. (N. S.) 849. If oil is being produced from the land in paying quantities at the end of the definite term, the lease continues so long as oil is so produced, but when production ceases the lease is at an end [United States v. Brown (D. C. Okl.) 15 F.(2d) 565, 567], and if the lessee thereafter continues in possession, his relation with the lessor is that of a tenant at will, and the lease may he terminated by either party on notice. Cassell v. Crothers, 193 Pa. 359, 44 A. 446.
The fact that the lessee has, within the definite term, drilled for and produced oil in paying quantities will not extend the lease beyond the definite term, if such production in paying quantities has ceased at the time of the expiration of the definite term. Union Gas & Oil Co. v. Adkins, supra; Anthis v. Sullivan O. & G. Co., supra; Cassell v. Crothers, supra.
Where tho lessor refuses to give possession to the lessee or wrongfully obtains an injunction against the lessee restraining op- orations oil the land, it has been held that the definite term will be treated as extended for the length of time that the lessee is thus kept out of possession or restrained from operations by the wrongful act of the lessor. Stahl v. Van Vleck, 53 Ohio St. 136, 41 N. E. 35; Standard Oil Co. of La. v. Webb, 149 La. 245, 88 So. 808.
The conduct of the lessor may create an estoppel which will preclude him from asserting a termination of the lease because of non-production at the expiration of the definite term. Ohio Fuel Oil Co. v. Greenleaf, 84 W. Va. 67, 99 S. E. 274; Hodges v. Miller (Tex. Civ. App.) 244 S. W. 634.
Production by another, without the lessee's assent and against his will, will not extend the lease beyond the definite term. Thomas v. Hukill, 34 W. Va. 385, 12 S. E. 522, 526.
It follows that, if the Osage Company was not producing oil from the leased premises at the expiration of the five-jrear term and such failure was not due to any fault of the lessor, the lease by its own limitations expired at the end of such term. Wilbur v. United States, supra.
Counsel for the Osage Company contend that a bill of review must be filed within ninety days after the entry of the decree sought to be reviewed,- and that when the decree has been affirmed by an appellate court such bill may not be filed without leave of such appellate court.
A bill of review may be filed to correct errors apparent on the face of the record. Under such a bill of review only questions of law which arise on the pleadings, proceedings, and decree may be considered. Matters of evidence and questions of fact may not be presented. Swift v. Parmenter (C. C. A. 8) 22 F.(2d) 142; Purcell v. Miner, 71 U. S. (4 Wall.) 519, 18 L. Ed. 459; Kennedy v. Georgia State Bank, 49 U. S. (8 How.) 602, 12 L. Ed. 1209; Hughes, Federal Practice, § 4492. Such a bill must be filed within the time limited for taking an appeal from the decree sought to be reviewed. Thomas v. Brockenbrough, 23 U. S. (10 Wheat.) 146, 6 L. Ed. 287; Clark v. Killian, 103 U. S. 766, 26 L. Ed. 607; Ensminger v. Powers, 108 U. S. 292, 302, 2 S. Ct. 643, 27 L. Ed. 732; Hagerott v. Adams (C. C. A. 8) 61 F.(2d) 35; Rothschild & Co. v. Marshall (C. C. A. 9) 51 F.(2d) 897, 898. A bill of review based on newly discovered evidence, however, is not subject to such limitation; it is governed by the equitable principles of laches. Central Trust Co. v. Grant Locomotive Works, 135 U. S. 207, 10 S. Ct. 736, 34 L. Ed. 97; Tilghman v. Werk (C. C. Ohio) 39 F. 680; Hagerott v. Adams, supra; Hughes, Federal Practice, § 4496.
Leave of court is not required to authorize the filing of a bill of review for errors apparent on the face of the record, but a bill of review for newly discovered evidence, where the decree has been affirmed by the appellate court, may not be filed without leave of that court. Hagerott v. Adams, supra; Rothschild & Co. v. Marshall, supra.
In Osage O. & R. Co. v. Continental Oil Co., 34 F.(2d) 585, 589, we quoted from Story's Equity Pleadings (9th Ed.) § 338, as follows:
"A supplemental bill may also be filed, as well after as before a decree; and the bill, if after a decree, may be either in aid of the decree, that it may be carried fully into execution, or that proper directions may be given upon some matter omitted in the original bill, or not put in issue by it, or by the defense made to it. But, where a supplemental bill is brought in aid of a decree, it is merely to carry out, and to give fuller effect to, that decree, and not to obtain relief of a different kind on a different principle; the latter being the province of a supplementary bill in the nature of a bill of review, which cannot be filed without the leave of the court."
Here a dispute has arisen between the parties as to whether the Osage Company has eomjffied with the conditional provisions of the decree, and the rights and obligations of the parties under the decree. The supplemental bill tendered with the application seeks to give effect to and have enforced the conditional provisions of that decree; not to set aside or avoid such decree. It is a supplemental bill, and the Continental Companies had the right to file it without leave of this court.
Counsel for the Osage Company as-^ sert that the application of the Continental Companies was properly denied because the matters set up in the supplemental bill tendered therewith should have been set up in the answer of the Continental Company of Maine, as a defense to the cause of action asserted by the Osage Company, and in the supplemental bill tendered with the application filed September 30, 1929.
It is true that the Continental Company of Maine did not set up in its answer to the bill of complaint of the Osage Company any facts with respect to the existence or termi nation of the lease as between the Osage Nation and the Osage Company. The court in its decree of April 29, 1927, adjudged that, as between Mamie Axelrod and the Osage Company, the Osage Company was the owner of the lease. That was the only issue as to title in the original suit. The court there did not undertake to pass upon whether the lease was still in effect as between the Osage Nation and the Osage Company. By the conditional provisions of the decree, it reserved that question for future determination. Axelrod v. Osage O. & R. Co., supra (C. C. A.) page 730 of 29 F.(2d); Wilbur v. United States, supra, page 438 of 54 F.(2d), 60 App. D. C. 326. This was proper. Under applicable acts of Congress (section 3, Act June 28, 1906, 34 Stat. 539, 543; sections 1 and 2, Act March 2, 1929, 45 Stat. 1478, 1479) and the express terms of the lease, the determination of that question was reposed in tho Secretary of Interior. Wilbur v. United States, supra. Furthermore such a deoree would not have been binding on the United Slates and the Osage Nation, since they were not parties to the suit, and the United States could not have been made a party without its consent.
Under these circumstances we are of tho opinion that the Continental Company of Maine was not required to set up the termination of the lease as a defense in such answer, and that the decree of April 29, 1927, does not bar the Continental Companies from setting up the facts alleged in their supplemental bill.
The doctrine of res adjudícala does not apply with the same strictness to interlocutory orders on motions as it does to judgments. Riggs v. Purs ell, 74 N. Y. 370; Clopton v. Clopton, 10 N. D. 569, 88 N. W. 562, 88 Am. St. Rep. 749; La Plante v. Knutson, 174 Minn. 344, 219 N. W. 184; Hall Oil Co. v. Barquin, 33 Wyo. 92, 237 P. 255; Johnson v. Nelson, 43 Cal. App. 113, 184 P. 501; Bishop v. Smith, 66 Kan. 621, 72 P. 220; Reeves & Co. v. Best, 13 Colo. App. 225, 56 P. 985; Silvander v. Molthan, 46 S. D. 231, 191 N. W. 837; Steuben County Bank v. Alberger, 83 N. Y. 277; Ford v. Doyle, 44 Cal. 635. The court may grant leave to a party to renew a motion based upon different or additional facts. State v. District Court, 50 Mont. 435, 147 P. 614; Riggs v. Pursell, supra; Ford v. Doyle, supra ; Jensen v. Barbour, 12 Mont. 566, 31 P. 592; Weber v. Tschetter, 1 S. D. 205, 46 N. W. 201, 203-204.
Whether the lease expired on August 27, 1923, 1he end of the definite term, because oil was not then being produced thereon in paying quantities by the Osage Company, was a question primarily for the determination of the Secretary of Interior. The application to file the first supplemental bill was filed September 30, 1929. The hearing before the superintendent of the Osage Indian Agency and the first report of the superintendent antedated the filing of such application. But the second report of such superintendent, the hearing before the Commissioner of Indian Affairs, the report of the latter to the Secretary of Interior, and the decision of the latter were all subsequently thereto, as was the judgment by the Court of Appeals of the District of Columbia.
The tendered supplemental bill is not predicated upon the fact alone that the lease expired August 27, 1923, but upon the determination of that fact by the Secretary of Interior, and the judgment of the Court of Appeals of the District of Columbia. It is therefore based on facts that have arisen since the former application was filed.
It is true that on April 18, 1930, after the Osage Company had filed its response to the first application, the Continental Company of Delaware filed a supplemental application to file a supplemental hill in which it alleged that on February 26, 1930, the Secretary of Interior disapproved the assignments from the Osage Company of Maine "on the ground that the Osage lease had theretofore terminated and that there was not then any lease in force and effect subject to transfer," and stated that it desired to include in its supplemental bill an allegation of such action by the Secretary, hut it did not tender any amended supplemental bill; and it did not allege that oil was not being found or produced in paying quantities on the lease at the end of the definite term, April 27, 1923, a finding thereof by th'e Secretary of Interior, and a loss or termination of the lease because thereof, the basis of the supplemental bill which the Continental Companies now seek to file. No response was filed to the supplemental application. and the order of the Secretary of February 26, 1930, and the proceedings which led up thereto, and especially the alleged finding by the superintendent of the Osage Agency and the Commissioner of Indian Affairs that oil was not being found on the lease in paying quantities at the end of the definite term, and the alleged approval of such finding by the Secretary, were not introduced nor before the trial court at the hearing on the application to file the first supplemental bill. Indeed it is not clear that the trial court ever passed on the supplemental application. The first application and. supplemental bill were predicated on facts which occurred subsequently to the decree of April 29, 1927; and the second application and supplemental bill are predicated on facts which occurred before such decree and since found by the Secretary of Interior. We conclude that the supplemental hill, which the Continental Companies now seek to file, is based on new grounds and tenders new issues not presented by the prior applications of September 30, 1929, and April 18, 1930, and not heretofore passed on by the trial court or this court. See further discussion in note.®
It follows that the denial of the former application to file a supplemental bill is not a bar to granting the present motion.
Nor were the Continental Companies guilty of laches. The facts on which the present motion and supplemental bill are predicated arose in 1930 and 1931, and the application to file the bill was filed in July, 1932. The filing thereof might well have been delayed until the final determination of the mandamus case.
A finding by the Secretary of Interior that the Osage Company was not producing oil and gas from the lease on August 27, 1923, and that the lease terminated on that date, would be binding on the courts in the absence of a showing that the Secretary's action was arbitrary or fraudulent. Heath v. Wallace, 138 U. S. 573, 11 S. Ct. 380, 34 L. Ed. 1063; Burfenning v. Chicago, St. P. M. & O. R. Co., 163 U. S. 321, 16 S. Ct. 1018, 41 L. Ed. 175; Miller v. United States (C. C. A. 10) 57 F.(2d) 987.
In the mandamus proceeding in the Supreme Court of the District of Columbia, the Secretary of Interior alleged such a finding and deLomination. There was a demurrer to such answer. The demurrer was sustained. The Secretary stood on his answer and appealed. The facts assumed in Wilbur v. United States, supra, are necessarily the facts well pleaded in the answer. Whether the Secretary of Interior in fact made such a finding and determination is still a question to be determined.
The decision of this court in Continental Oil Co. v. Osage O. & R. Co., 57 F.(2d) 527, precludes the Continental Companies from setting up any default on the part of the Osage Company, which would cause a loss or termination of the lease, that occurred subsequently to the decree of April 29, 1927, but not any such defaults that occurred prior thereto.
Clearly any defaults by the Osage Company resulting in a termination of the lease prior to the decree of April 29, 1927, were not caused or induced by any act or omission of the Continental Companies. For such defaults the Osage Company alone was responsible. Nor were the Continental Companies required to present other than the facts and all the facts to the Secretary of Interior when presenting the assignments for approval.
The decree of April 29, 1927, was conditional. If the Osage Company, prior to such decree, committed defaults which resulted in a termination of the lease and the Secretary of Interior has since so found, and the Osage Company because of such defaults and resultant termination of the lease was disabled from complying with the conditional provisions of the decree, the Continental Companies should be permitted to set up by supplemental bill and prove such defaults, resultant loss, and finding, and invoke their rights under such conditional provisions. Wo so held and indicated the proper procedure in Osage O. & R. Co. v. Continental Oil Co., 34 F.(2d) 585. The Continental Companies have never been permitted to file a supplemental bill and assert their rights under such provisions. They have never had their day in court on their claimed rights in a proper proceeding.
We are of the opinion that the supplemental bill on its face states ground for relief under the conditional provisions of the decree of April 29, 1927, and that the trial court should have granted the application.
The order is reversed with instructions to permit the filing of the supplemental bill.
"The decree" also provided in terms that the Continental Oil Company, with the assistance of the Osage Company, should attempt to secure the approval of the Secretary of the Interior, thereby recognizing the necessity of such an approval to make enforceable the decree of the court since the Secretary of the Interior was not a party to the proceedings. "
a The decree entered in the. instant case on April 29, 1927.
"The court, however, did not assume to control the action of the Secretary of the Interior who was not a party to these suits. On this point, the courtb said:
" 'Appellant contends that the alleged contract can not be enforced in equity because its validity depends upon approval fry a third party — the Secretary of the Interior. There is ño effort in the decree to compel the Continental' Company to accept a lease from the Osage Company that has not been approved by the Secretary of the Interior. The Axelrod contract provided that, "if said assignment and this contract are duly approved, then second party shall forthwith carry out and perform all the further agreements herein contained." In the decree the court provided that the Continental Company with the assistance of the Osage Company, should attempt to secure the approval of the Secretary of the Interior.' " Page 43$ of 54 F.(2d).
b The Court of Appeals of the 8th Circuit in Axelrod v. Osage O. & R. Co., 29 F.(2d) 712, 730.
"As a result of the foregoing litigation, the Osage Company presented to the Secretary of the Interior, for his approval, an assignment to the Continental Oil Company of a one-half interest in the lease as directed by the court. Objection was made by the Continental Oil Company on the ground that the lease had expired by reason of the lessee's failure to produce oil in paying quantities in compliance with its terms. The secretary was called upon then to make a thorough investigation and review of the case. After hearing, the Secretary found that the lease had expired through the failure of the lessee to produce oil in paying quantities after its five-year term bad ended. He accordingly declined to approve the tendered assignment. " Page 438 of 54 F. (2d).
"The court proceedings, after the annulment of the foreclosure sale to Axelrod, related entirely to the title to the lease between the Osage Company and the Continental Oil Company, and it seems more particularly to acquiring possession of the $50,000 in escrow. The whole subject-matter of the suits in the courts related to the ownership of the lease. .The question, whether the lease had expired by its own express limitation, was not before the courts and they wisely refrained from expressing any opinion thereon, but left it to the determination of the Secretary of the Interior, where it properly belonged. u " Page 4391 of 54 F.(2d).
"That the land here in question was not producing oil in paying quantities at the end of the five-year period, or any time thereafter, is beyond dispute. With this fact established, there was nothing left for the Secretary to do but to deny the application of the Osage Company and permit his former decision, that the lease had terminated, to stand. It follows that the Secretary, being called upon to examine and'pass upon evidence on which to form his judgment in a matter wholly within his jurisdiction, was exercising a quasi judicial discretion which cannot be controlled by mandamus. " Page 439 of 54 F.(2d).
"It is unnecessary for us to consider tbe effect of the approval, by the Secretary, of the assignment from the sheriff to Mamie Axelrod or of his approval of the Axelrod contract with the Continental Oil Company, since it was later decreed by the court that Axelrod acquired no title in the premises by the sheriff's sale and consequently had no title to transmit to the Continental Oil Company. Certainly the Osage Company is not in a position to come in now and claim any benefit from these approvals by way of extension of its lease. Its lease had terminated by its own limitation so far as it was concerned and there is nothing to show that it had ever been revived, even if revival were possible. " Page 439 of 54 F.(2d).
In Riggs v. Pursell, supra, the court said:
"Wo do not understand tho rules applicable to judgments as estoppels to be applicable to their lull extent to orders made on motions. Prior to the decision in Dwight v. St. John, 25 N. Y. 203, it was considered that a decision made upon a motion had no forro as a former adjudication. (Simson v. Hart, 14 Johns. 63-76; Van Rensselaer v. Sheriff of Albany, 1 Cow. 501, 512; Dickenson v. Gilliland, 1 Cow. 481, 495: Smith v. Spalding, 3 Rob. [26 N. Y. Super. Ct.] 613; White v. Munroe, 33 Barb. 650.) In Dwight v. St. John in view of the provisions of the Code giving tho right of appeal from orders, a limited effect was given t.o them as adjudications, binding in ease of a subsequent controversy, and it was there held that in tho case of a.n order affecting a substantial right, and appealable, where a full hearing had been had before a referee on a controverted question of fact, the decision of a, point actually litigated before the referee and upon the motion was an adjudication binding upon the parties and conclusive to that extent. An examination of the case shows that the effect of an order as an adjudication was thus expressly limited, and that it was not held in that case that the order was conclusive as to a fact which might have been litigated, but only as io one which actually had been litigated and on which there had been a full hearing. Nor was the familiar right of a party to renew a motion upon a, different state of facts, or by supplying defects in proof, in any manner questioned or impaired by that decision. In re Livingston, 34 N. Y. 555, 575, the application which was reheard at Special Term was made upon petition and was held to be a special proceeding in equity, not subject to the rules governing motions. Where additional facts are presented or defects in proof supplied, it is quite usual to grant leave to renew a motion which has been denied or to rehear one which has been granted. (Smith v. Spalding. 3 Rob. [26 N. Y. Super. Ct.] 615; Belmont v. Erie R. Co., 52 Barb. 637 and authorities cited.) And in White v. Munroe, 33 Barb. 650, the power of tho court to reconsider its decision on the same state of facts is maintained, though such power is rarely exercised. The rule requiring leave to be obtained before renewing a motion is one of practice merely, to avoid confusion and abuses, hut does not affect the power of the court to reconsider its decision on a motion, upon additional facts. In this respect such decisions and orders differ essentially from judgments in actions or special proceedings."
The dissenting opinion states that the order of the Secretary of Interior disapproving the assignments to the Continental Companies and the opinion of the Court of Appeals of the District of Columbia were considered by this court on the appeal from the order denying leave to file the first supplemental bill. We must assume, however, that they were considered only in so far as they bore on the issues presented by the application to file the first supplemental bill and the application supplemental thereto, which were predicated wholly on facts which occurred subsequently to the decree of April 29, 1927. Surely the court did not on that appeal undertake to decide issues not presented, and did not consider facts wholly irrelevant to such issues.
At the hearing in the trial court on the application to file the first supplemental bill, the order of the Supreme Court of the District of Columbia for a writ of mandamus directing the Secretary of Interior to approve such assignments 'was introduced by the Osage Company. Pending the appeal from the order denying leave to file the first supplemental bill, the Court of Appeals of the District of Columbia reversed such order for a writ of mandamus. At the hearing on such former appeal the decision of the Court of Appeals of the District of Columbia was pertinent to show such reversal, and for no other purpose.
Furthermore, what was said in the opinion by this court on such former appeal and in the order denying the petition for rehearing filed therein, must be read and considered in the light of the issues presented by the pleadings and the facts relevant to those issues. We cannot assume that the court considered facts not pertinent to the issues made by the pleadings, nor that it decided questions not presented thereby. The opinion upon such former appeal does not indicate that this court undertook so to do. It in part states:
"Appellant suggests in the briefs that the mere fact that the lease expired is enough; that the subject-matter of the decree no longer exists; there can be no approval of a non-existing lease, and without such approval the appellant is entitled to the return of the $59,000.00 under the decree.
"But this is not the issue tendered, either by the application to file the supplemental bill, or by the bill itself. Both set out that appellee failed to carry out the decree; the application then states 'by reason of such failure and default on the part of said plaintiff, the lease involved in this case has terminated'; the bill alleged that 'by reason of the failure to operate the above leasehold estate by the Osage Oil & Refining Company after the original decree of this court of April 29, 1927, said lease was by such company allowed to terminate.' "
—thereby showing it was confining its consideration strictly to the issues presented.
After a further consideration of the records in this and the former appeal, we adhere to our conclusion that the second supplemental bill is predicated on the alleged fact that oil and gas was not being found on the lease at the end of the definite term, August 27, 1923, the alleged finding of such fact by the superintendent of the Osage Agency, the Commissioner of Indian Affairs and the Secretary of Interior after the application to file the first supplemental bill had been filed, and the legal effect of such finding as adjudged by the Court of Appeals of the District of Columbia, and that this court has not heretofore passed upon the claimed rights of the Continental Companies to relief under the conditional provisions of the original decree on account thereof.
Furthermore, if in fact, due to neglect for which the Osage Company alone was responsible, oil was not being found on the lease at the end of the definite term, August 27, 1923, and the lease, because thereof, had terminated long before the decree of April 29, 1927, and the Secretary of Interior and his subordinates since such decree and since the first application to file a supplemental bill was filed has found such fact and declared such termination, a court of equity should not be .too assiduous to discover technical grounds to enforce a decree that will result in inking $50,000 from iho Continental Com-iraníes tor the assignments oí a lease? that had ceased to exist at the time that decree was entered, when that decree contains a conditional provision to protect the Continental Companies against such a failure of title.