Court Opinion

ID: 9450648
Source: CourtListenerOpinion
Date Created: 2023-08-04 16:54:04.837766+00
Date Added: 2024-06-11T17:32:24.383764
License: Public Domain

WISDOM, Circuit Judge
(dissenting):
I respectfully dissent.
I do not say that the Court’s decision is likely to start dangerous temblors in American federalism. It has always been in the cards that federal common law would expand as the activities of the national government expanded.1 For many years, before Erie, the federal “judge followed his own nose”; he “sat down and looked up what relevant federal law there might be in the cases and otherwise decided what the law ought to be * * * though in some few instances the judge might consider relevant state decisions”.2 Moreover, I agree with Judge Henry Friendly’s summary of the development, since Erie, of the “new” federal common law: “We may not have achieved the best of all possible worlds with respect to the relationship between state and federal law. But the combination of Erie with Clearfield [Clearfield Trust Co. v. United States, 318 U.S. 363, 63 S.Ct. 573, 87 L.Ed. 838] and Lincoln Mills [Textile Workers of America v. Lincoln Mills of Alabama, 353 U.S. 448, 77 S.Ct. 912, 1 L.Ed.2d 972] has brought us to a far, far better one than we have ever known before.” 3 But I do say that in this case the Court’s resort to federal common law is so inappropriate as to amount to a deep and uncalled-for cut against the grain of American federalism.
I.
We sit as an Erie court, bound by the law of Louisiana; bound too by the Rules of Decision Act. Yet in this squabble between private persons the Court holds that the nature of the ownership of the lease, that is, the nature of the lessee’s
*443interest in the minerals as against third party claimants, is a matter to be determined by judge-made federal common law. The Court brushes aside the state’s longstanding public policies against title by parol4 and against resulting and constructive trusts, devices alien to the civil law.5 The “jurisprudence of this State *444* * * has been consistent to the effect that the transfer of an interest in a mineral lease cannot be made the subject of a verbal agreement and cannot be proved by parol evidence.” Hayes v. Muller, La. App.1962, 146 So.2d 176, 179. On remand, the law the district judge must conjure up is as uncertain and insubstantial as the “brooding omnipresence in the sky”, of which Justice Holmes spoke, because this evanescent law is not the articulate voice of a sovereign that can be identified.6
The holding of the Court carries alarming implications. If federal common law controls and the claimants hold an equitable title by virtue of a constructive trust, what is Mrs. Wallis’s interest? Assuming that Wallis has a part interest as lessee, does his wife have half of his interest as her share in the community? Or is she a common law partner with him? Or does she have no interest in the lease ? Are Wallis’s children deprived of their legitime, their forced portion of their father’s estate, as to their father’s interest in the lease? I hope my fears are all bloodless ghosts. But if a federal court, in the name of interstitial law-making, may concoct a Law of Property, Law of Contracts, Law of Restitution and, perhaps, a Law of Descent and Distribution for Mississippi Mud-Lumps, I foresee the fashioning of some fancy legal systems for a great many federal enclaves within the borders of the states.7
II.
“There is”, of course, “no federal general common law”.8 However, the term “federal common law”, like Justice Rutledge’s substitute term, “law of independent judicial decision”,9 is an acceptable euphemism for federal judicial legislation. No one can quarrel with such lawmaking when congressional intent and national interest speak in the loud, clear voice of the sovereign. But the fact that there are interstices in a federal statute is not enough in itself to justify a court’s applying federal common law. There are interstices in every statute.
Before a court plugs a statutory gap with federal law that is inconsistent with local law and that here is also contrary *445to established state policies, consideration for the position of the states in the federal system suggests that the Court find congressional intent that federal common law should. prevail over state law.10 “The political logic of federalism supports placing the burden of persuasion on those urging national action.”11 When congressional intent is unclear or when a specific congressional intent never existed, a reasonable criterion is that judge-made common law should not prevail over local law unless that result is manifestly in the national interest. Uniformity for uniformity’s sake does not meet this criterion; under Erie and the Rules of Decision Act, diverse local law controls the hum-drum disputes of private litigation that do not raise a federal question and do not conflict with the interests of the United States. In this case, I find no congressional intent and no compelling national interest sufficient to justify an independent federal rule displacing long accepted state law.
This is a dog-eat-dog, no-holds-barred fight between private persons, each crying foul, over the nature of the ownership of a lease. Resolution of the controversy depends upon legally acceptable proof of the relationship of Wallis to McKenna and Pan-American. It is true that the acts generating the litigation took place before execution of the lease. The point in time when these acts occurred, however, is not important to the United States as lessor, as it was in Irvine v. Marshall, 1858, 20 How. 558, 15 L.Ed. 994, since the dispute arose after title to the mineral leasehold had passed from the United States to Wallis.12 Besides, Mc-*446Kerma and Pan-American do not question the validity or effectiveness of the transfer of the mineral leasehold from the United States to Wallis. On the contrary, it is essential to their position that they accept the validity of Wallis’s lease: McKenna claims a one-third interest in the lease as a joint venturer; Pan-American demands an assignment of the lease under an option contract.
Whether Wallis holds the lease for himself or for others and whatever the interests of McKenna and Pan-American may be as against Wallis, the United States is protected by the terms of the lease and by statutory requirements that the Secretary of Interior investigate and approve Wallis and any assignee or sub-lessee. The United States owns the fee and exercises tight control over the lease through the Secretary’s power to prescribe rules and regulations governing in minute detail all facets of the working of the land leased.
The United States has of course a proper interest in knowing the nature of the lessee’s ownership. In the first place, the policies of the United States in favor of conservation of national resources and prevention of monopolies require the Secretary to know the true owners of the lease. The Act provides, therefore, for full disclosure of the lessee’s interest in order to prevent lease-grabbing through the use of strawmen. Second, for obvious reasons, it is administratively convenient for the Secretary to deal with the record owner as the true owner. In general, these policies and interests will necessarily be affected adversely by the common law’s recognition of unwritten, undisclosed trusts arising from the breach of a fiduciary relationship unknown to the Secretary. On the other hand, the civilian antipathy to oral, hidden trusts and equitable liens works hand in glove with the policies and interests of the United States. Certainly in this case, Judge Wright’s adjudication that Mc-Kenna and Pan-American have no provable claim to the lease represents the optimum Congress and the Secretary could expect in administrative convenience and in the disclosure of outside interests.
Beyond all of this, a serious question exists as to whether the doctrine of separation of powers permits the judiciary, in effect, to force lessees upon the executive. And there is also the question whether the Act allows a court to select as assignees persons whom the Secretary has not investigated and formally approved. The policy objectives of the statute and its protective provisions may be easily circumvented, if courts have the power to reverse the Secretary’s choice of lessee by recognizing third parties as the legal lessees by virtue of an unwritten option, assignment, or joint venture.
III.
In concluding that the issue for decision is a federal matter the Court, if I may say so, relied on this syllogism: (1) the federal Mineral Leasing Act permits options and assignments of leases approved by the Secretary; (2) here, in essence, the claims are an alleged option and an alleged assignment; (3) therefore the claims are a federal matter. This reasoning does not stand up.
The Court’s conclusion is a glaring non sequitur, unless the terms “option” and “assignment” are taken to include contested, amorphous claims such as Mc-Kenna and Pan-American present. But this is an impossible construction of the Act. Congress could have intended only that the Secretary approve uneontested options and assignments or, possibly, such agreements validated by adjudication. If a court has decreed the validity of a formal lessee’s total ownership of a lease against third persons, or, in another case, if a court should validate all or part of the transfer of a lessee’s interest, it is difficult for me to understand what difference it makes to the United States whether the Court has used state law or federal common law.
The Secretary has the ability to prevent a lease from falling into the hands of someone who should not have it. The Secretary’s determination that a lease or *447an assignment of a lease meets the requirements of the Act evidences compliance with the rules and regulations protecting the interests of the United States. That determination is unquestionably a federal matter. But the rights of action, if any, of McKenna and Pan-American against Wallis are state-created. And their validity or invalidity is determinable without regard to the Act, the regulations, or the Secretary’s approval. In short, here, as in tax law or in federal procedure or in many other areas of the law where the nature of a litigant’s interest unquestionably is important to the federal government — absent a conflict between the State and the Nation, accepted principles of federalism recognize that state law should determine the nature of the litigant’s property interest, and federal law should determine the federal rules applicable to that particular type of property ownership.13
The Court’s reasoning seems to overlook McKenna. McKenna claimed as a joint venturer, not as an assignee. I do not see how his claim can be lumped with Pan-American’s claim. If the reference in the Act to secretarial approval of options and assignments makes a federal matter of all litigation touching such contracts, the statutory silence with respect to joint ventures should 'be taken to mean that McKenna’s alleged joint venture with Wallis is not a federal matter. I do not underscore this point. I mention it only to demonstrate that no special federal significance should be attached to the mention of “options” and “assignments” when it is manifest that the Secretary’s approval of all original leases and all transfers is required under the Act.
IV.
After finding that the plaintiffs’ claims were “federal matters”, the Court still could not fashion and apply federal common law without first holding that application of state law would affect, seriously and adversely, the interests of the United States. The Court managed this conclusion in just one sentence:
“We do not think the use of these devices [assignments and options] as a part of the scheme of carrying forth this public policy [the development of our mineral resources and increasing our domestic reserves] should be limited by the interstitial restrictions imposed by the law of the State of Louisiana, which are not present in the other states.”
The fact is, Louisiana imposes no special limitations, interstitial or otherwise, on assignments and options. Louisiana does require, as do common law states, that all contracts affecting immovables (real property), including mineral leases, be in writing. The Statute of Frauds is no stranger to the common law. The only pertinent Louisiana limitation affecting mineral leases is the rule against resulting and constructive trusts. This established civilian principle — as a practical matter, a principle rarely called into operation — is the sole and narrow basis for the Court’s holding that if state law is applied the Nation will suffer.
If this one-sentence finding on which the Court’s decision rests is corrected and paraphrased realistically, the holding shakes down to this bizarre result:
Trusts ex maleficio are part of the, congressional scheme for carrying out, *448the national policies on mineral resources and monopoly. In litigation between private persons over the nature of the ownership of a federal mineral lease, national policies on mineral resources and monopoly will suffer unless courts recognize beneficial title to the lease in a claimant whom the Secretary has not investigated and has not approved as lessee, and who-may be unknown to the Secretary.
To restate this holding in accurate, realistic terms is to expose the unreal, speculative character of the Court’s notion that federal common law controls this case.
V.
I find no decisional and no doctrinal support in the majority’s position. I turn now to a small sampling of leading cases.
Clearfield Trust Co. v. United States, 1943, 318 U.S. 363, 63 S.Ct. 573, 87 L.Ed. 838, was the Supreme Court’s first important decision on federal common law after Erie. The United States sued to recover on an express guaranty of prior endorsements on a government check containing a forged endorsement. The court held that state law was inapplicable^ The United States was a party to the litigation, but more importantly since the right of the United States to recover for conversion of a government check is a federal right, the courts of the United States could properly formulate a rule of decision. Uniformity was desirable; state law would be “singularly inappropriate” because its application to commercial paper of the United States “would subject the rights and duties of the United States to exceptional uncertainty”.
Mr. Justice Douglas, author of the Clearfield opinion has recently cast some doubt on its scope :
“As respects the creation by the federal court of common-law rights, it is perhaps needless to state that we are not in the free-wheeling days antedating Erie R. Co. v. Tompkins, 304 U.S. 64, [58 S.Ct. 817, 82 L.Ed. 1188]. The instances where we have created federal common law are few and restricted. In Clearfield Trust Co. v. United States, 318 U.S. 363 [63 S.Ct. 573, 87 L.Ed. 838], we created federal common law to govern transactions in the commercial paper of the United States; and we did so in -view of the desirability of a uniform rule in that area. Id., p. 367 [63 S.Ct. p. 575]. But even that rule was qualified in Bank of Amercaa Nat. Trust & Savings Ass’n v. Parnell, 352 U.S. 29 [77 S.Ct. 119, 1 L.Ed.2d 93].” (Emphasis supplied.) Wheeldin v. Wheeler, 1963, 373 U.S. 647, 83 S.Ct. 1441, 10 L.Ed.2d 605.
This brings us to Bank of America National Trust and Savings Association v. Parnell, 1956, 352 U.S. 29, 77 S.Ct. 119, 1 L.Ed.2d 93, one of the two authorities cited in the opinion on rehearing for the majority’s principal holding. As in the instant case, Parnell was a diversity action between private persons. The suit was over stolen bearer bonds (in a general sense analogous to the lease here) issued by the Homeowners Loan Corporation, a federal agency, and guaranteed by the United States. The Bank sued to recover the value of the bonds Parnell had cashed. The Court held that federal law controlled the question whether the bonds were “overdue”, because it related to the nature of the rights and duties of the Government. But the Court held also that state law controlled the question whether Parnell had met the burden of proving good faith. “Government securities” generate immediate interests of the Government, but the “present litigation is purely between private parties and does not touch the rights and duties of the United States.” The possibility that “the floating of securities of the United States might somehow or other be adversely affected by the local rule of a particular State regarding the liability of a converter * * * is far too speculative, far too remote a possibility to justify the application of federal law to transactions essentially of local concern”. 352 U.S. *449at 33, 77 S.Ct. at 121. See Wright, Federal Courts, § 60 at 216 (1963). Parnell is clearly contrary to the majority opinion.
Free v. Bland, 1962, 369 U.S. 663, 82 S.Ct. 1089, 8 L.Ed.2d 180, turned on a specific Treasury regulation designed to make savings bonds attractive to purchasers by a survivorship provision eliminating the necessity for expensive or time-consuming probate proceedings. To allow state law to frustrate this purpose would permit the states to constrict measures designed to help the federal treasury borrow money. In line with Clearfield and Parnell, the Court applied federal law. The Court made the following comment on Parnell, a comment appropriate here:
“[T]hat case [Parnell] held that, in the absence of any federal law, the application of state law * * * was permissible, because the litigation between the two private parties there did not intrude upon the rights and the duties of the United States, the effect on the only possible interest of the United States — the floating of securities — being too speculative to justify the application of a federal rule.”
In Free v. Bland, state law conflicted with a distinct federal rule that the Treasury had consistently advocated and that supported the paramount interests of the United States.
Although the United States was a party in Clearfield and its presence in litigation may in some cases be a factor, the principal teaching of Clearfield, Parnell, and Free v. Bland, as a group, is that federal common law is applicable when the state law substantially conflicts with the rights of the United States and where lack of uniformity causes “exceptional uncertainty” in determining the rights and duties of the United States.
Textile Workers Union of America v. Lincoln Mills of Alabama, 1957, 353 U.S. 448, 77 S.Ct. 912, 1 L.Ed.2d 972, is not cited in the Court’s opinion on rehearing but apparently is implicit in the Court’s reliance on interstitial law-making. Lincoln Mills involved specific performance of an arbitration clause in a labor contract. Under section 301 of the Taft-Hartley Act, federal courts have jurisdiction over suits on labor contracts affecting interstate commerce, although there is no specific provision about enforcing arbitration clauses. The Supreme Court held that section 301 was a mandate to fashion and apply a federal common law governing labor contracts. It should be remembered, however, that specific performance of arbitration agreements was prohibited by the law of Alabama, contrary to th.e strong congressional policy in favor of enforcement of labor arbitration. “To be consistent with that [congressional] policy you need to have specific performance of the arbitration agreement; that would bolster the policy rather than detract from it; so in this area the issue may be federal, that is, subject to federal common law rather than state law if that-issue, though not covered squarely or impliedly by any federal statute or any federal treaty or constitutional provision, nevertheless would substantially affect the policy of such federal law.” Morgan, The Future of Federal Common Law, 17 Ala.L.Rev. 10, 14 (1964). Again, as “Judge Rives [has] pointed out, there was behind Lincoln Mills a clear discernible federal policy in favor of collective bargaining agreements” and also “a huge body of federal labor law on which the courts draw in fashioning a substantive body of labor contract law”.14 This is legitimate “interstitial legislation” because of discernible congressional policy. Dean Cowen, more accurately, calls it a “delegation” by Congress to the Judiciary of a portion of its legislative power.15 There is of course no federal policy touching resulting and constructive trusts of federal mineral leases; no substantial conflict here between the state and federal policies; no clear mandate to fashion a *450federal substantive law of trusts ex maleficio affecting mineral leases.
The other case the Court relies on is Francis v. Southern Pacific Co., 1948, 333 U.S. 445, 68 S.Ct. 611, 92 L.Ed. 798 16 But Francis lends no support to the majority. In Francis, the Supreme Court based its decision on the accepted “and well-settled construction of the Act” that the liability of an interstate carrier to one riding on a free pass was determined not by state law but by the Hepburn Act. This construction has been “unchallenged” in the Supreme Court and “in Congress too”. The Transportation Act of 1940 reenacted the free pass provisions “without further change or qualification”. The Court said, therefore, that it was not “writing on a clean slate”; “the long and well-settled construction of the Act plus reenactment of the free-pass provision without change of the established interpretation” had become “part of the warp and woof of the legislation.” “[S]tate law which conflicts with this federal rule governing interstate carriers must therefore give way by virtue of the Supremacy Clause.”17
The “presence of a federal statute does not necessarily imply that there is a congressional intent that any particular issue be resolved by reference to federal law”.18 The Federal Communications Act is unquestionably a comprehensive statute regulating a subject of national importance in which the United States has an overriding interest. Just as the Mineral Leasing Act regulates the issuance and transfer of federal mineral leases, the Communication Act regulates the issuance and transfer of radio licenses. Regents of the University System of Georgia v. Carroll, 1950, 338 U.S. 586, 70 S.Ct. 370, 94 L.Ed. 363, concerned the construction of a contract transferring the licensee’s control of its radio station to a broadcasting company. When the licensee repudiated the contract, the broadcasting company sued for an accounting. The Court held that state law .governed the relationship between the parties as established by the contract between the parties. The Court’s reasoning is clearly applicable to the parallel situation the instant case presents:
“Congress has enabled the Commission to regulate the use of broad*451casting channels through a licensing power. * * * The Commission may impose on an applicant conditions which it must meet before it will be granted a license, but the imposition of the conditions cannot directly affect the applicant’s responsibilities to a third party dealing with the applicant. * * * We do not read the Communications Act to give authority to the Commission to determine the validity of contracts between licensees and others.” 338 U.S. at 600, 602, 70 S.Ct. at 337, 338.
Within the scope of its objectives as a mineral leasing law, the Act here is comprehensive and no doubt has many interstices to be filled, in the proper case, by judicial resort to federal common law. But the Act does not purport to go beyond the lessee and lessor. The Secretary, like the Federal Communications Commission, may impose conditions that the lessee must meet, but the Secretary, although interested in disclosure of the nature of the lessee’s interest, has not tried to affect the legal relationship of the lessee to third parties. The controversy between the litigants, as it did in Carroll, takes place outside the Act, not within an interstice of the Act.
The only case squarely in point is Blackner v. McDermott, 10 Cir. 1949, 176 F.2d 498, which the Court noted as “involving a claim of ‘joint venture’ highly similar to McKenna’s claim here”, but declined to follow. The Tenth Circuit applied the law of Wyoming for the reason I would apply the law of Louisiana: the issue was “the relationship of the parties each to the other in respect of the leasehold estate.”
Decisions in this circuit in the area of federal decisional law are not distinguished for their consistency. In United States v. Sylacauga Properties, Inc., 5 Cir., 1963, 323 F.2d 487, we held that state law was inapplicable in a suit to foreclose an FHA mortgage under the National Housing Act. See also United States v. Taylor, 5 Cir. 1964, 333 F.2d 633, holding that federal law rather than state law applies to the interpretation of a disputes clause in a contract between private parties where there is a sufficient federal interest. The federal interest was in controlling and effecting prompt settlement of disputes between a sub-contractor and a prime contractor engaged in construction work for the Atomic Energy Commission. But see United States v. Yazell, 5 Cir. 1964, 334 F.2d 454, an action to recover on a note for a loan from the Small Business Administration. This Court held, surprisingly, perhaps, that the capacity of a married woman to contract with the federal government is controlled by state law, notwithstanding the effect such a decision might have on the administration of the national program for assistance to small business.
Leiter Minerals, Inc. v. United States, 5 Cir. 1964, 329 F.2d 85; affirmed subject to abstention, 1957, 352 U.S. 220, 77 S.Ct. 287, 1 L.Ed.2d 267, cannot be reconciled with the majority’s holding in the instant case. In 1935, the United States, acting under the Migratory Bird Conservation Act, contracted to purchase almost 9000 acres of land in south Louisiana. The seller reserved the minerals for a ten-year period with provisions for extensions of five years so long as certain minimum use was made of the rights. In Louisiana the sale or reservation of mineral rights establishes only a servitude or right to extract the minerals. Servitudes prescribe in ten-years for non-use, a prescription that cannot be avoided by contract. In 1938, before the conveyance, the Louisiana legislature adopted a statute providing that prescription of mineral rights should not run against the State or United States. This legislation was replaced by Act 315 of 1940 restricting the exemption to the United States. The Louisiana court held that Act 315 would not apply if the deed provided for a mineral servitude for fixed term, but would apply if the term were indefinite. Leiter Minerals, Inc., successor to the seller of the land, filed suit in 1953 to have itself declared owner of the mineral rights. The United States *452then filed suit to quiet title. This Court, applying state law, held that the reservation was for an indefinite term. Here, therefore, we have the United States a party to the litigation concerning its rights under a contract entered into pursuant to a federal statute. Directly affected are national policies under that statute, policies relating to the conservation of our national resources, and settled policies of federal land acquisition. Presumably the Government paid more to obtain the favorable term. “It seems reasonable to assume a congressional intent that rights for which the Government has paid should not be taken away by operation of special state legislation directed against the United States.” Note, 78 Harv.L.Rev. 891, 895 (1965). Finally, the case involved state legal concepts exceptionally complex and foreign to common law concepts. I must say, if federal common law applies in the case now before this Court, Leiter Minerals, Inc. was an a fortiori case for federal common law. This Court held otherwise:
“We have no doubt that the Congress could make federal law applicable, but we are equally clear that it had no intention to do so when it merely authorized the contract by which the United States acquired the property. State law must govern in the absence of a federal statute making federal law applicable. * * * [T]he rules of decision act always has had ‘application to state laws, strictly local, that is to say, to the positive statutes of the state, and the construction thereof adopted by the local tribunals, and to rights and titles to things having a permanent locality, such as the rights and titles to real estate, and other matters immovable and intra-territorial in their nature and character.’ Swift v. Tyson, 1842, 41 U.S. (16 Pet.) 1, 18, 10 L.Ed. 865.” Leiter Minerals, Inc. v. United States, 5 Cir. 1964, 329 F.2d 85, at 90.
In sum, I can find no decisional or doctrinal justification for applying judge-made federal common law to a private dog-fight in which the federal government’s interest, if any, seems to me to be that of a bored spectator. The speculation that trusts ex maleficio are part of the congressional scheme for conserving natural resources hangs by too fine a thread for me to see the connection. Under Erie and the Rules of Decision Act, Louisiana may decide for itself whether to preserve its civil law institutions or adopt alien institutions. The philosophy that brought American federalism into being keeps the national government out of local transactions involving only the determination of the nature of the legal relation of one person to another.

. See Mishkin, The Variousness of “Federal Law” s Competence and Discretion in the Choice of National and State Rules for Decision, 105 U.Pa.L.Rev. 797 (1957).

. Morgan, The Future of a Federal Common Law, 17 Ala.L.Rev. 10, 12 (1964).

. Friendly, in Praise of Erie — -And of the New Federal Common Law, 39 N.Y.U.L. Rev. 383, 422 (1964).

. In the opinion below Judge Wright correctly noted: “While the legislative declaration that rights in mineral leases are ‘real rights and incorporeal immovable [s],’ LSA-R.S. 9:1105, has not always been given full effect. [citing cases] * * * [T]he Louisiana Supreme Court has been consistent in reading § 1105 as requiring that contracts affecting such rights comply with the statute of frauds. Arkansas Louisiana Gas Co. v. R. O. Roy & Co., 196 La. 121, 198 So. 768; Davidson v. Midstates Oil Corporation, 211 La. 882, 31 So.2d 7; Wier v. Glassell, 216 La. 828, 44 So.2d 882; Acadian Production Corp. of Louisiana v. Tennant, 222 La. 653, 63 So.2d 343. * * * The rule applies to Mc-Kenna’s agreement, whether it is considered as creating a joint venture or an agency relationship. See Stack v. De Soto Properties, 221 La. 384, 59 So.2d 428, 430-431; LSA-C.C. Art. 2992. So does it apply to Pan American’s option " contract. LSA-C.C. Art. 2462.” Mc-Kenna v. Wallis, E.D.La.1961, 200 F. Supp. 468, n. 13 at 471. In Hayes v. Muller, La.App.1962, 146 So.2d 176, 179, the court held that an alleged joint venture effecting the transfer of an interest in a mineral lease cannot be made the subject of a verbal agreement and cannot be proved by parol evidence. The Louisiana Supreme Court affirmed, 245 La. 356, 158 So.2d 191, 198, commenting, on rehearing, that it had been “zealous * * * to guard against any deviation from the rule” that the “plaintiff cannot show an oral agreement to purchase property for him, and enforce the contract when it has been fraudulently violated (by acquisition in defendant’s name), despite the argument made therein that the evidence did not constitute an attack on the title of the defendant but was merely an attempt to profit from and through such title.”

. “Article 21 of the Louisiana Civil Code of 1870 authorizes the courts to apply equitable principles in their decisions. Porter v. Conway, 181 La. 487, 159 So. 725 (1934); see Willey v. St. Charles Hotel [Co.], 52 La.Ann. 1581, 1584, 28 So. 182, 186 (1899); see Franklin, Equity in Louisiana, 9 Tulane L.Rev. 485 (1935). However, it is frequently stated that from a theoretical viewpoint there can be no constructive trust in a civil law jurisdiction. See Patton, Future of Trust Legislation in Latin America, 20 Tulane L.Rev. 542, 548 (1946); see Wisdom, The Louisiana Trust Estates Act, 13 Tulane L.Rev. 70, 83 (1938).” Note, 26 Tul.L.Rev. 262 (1952). See also Note, 25 La.L.Rev. 276, 280 (1964).
Since all transfers of immovable property must be in writing and, under LSA-C.C. Arts. 2275, 2276, 2440, parol evidence is not admissible to vary the terms of a written conveyance or to prove an oral agreement of sale, a defrauded principal or joint venturer cannot through parol evidence prove title to immovables purchased by an agent or joint venturer under an oral mandate. Scurto v. Le-Blanc, 191 La. 136, 137, 184 So. 567 (1938); Ceromi v. Harris, 187 La. 701, 175 So. 462 (1930); see Note, 21 Tulane L.Rev. 286 (1946). However, parol evidence may be used to prove fraud or error in an action to rescind written sales of real estate. Baker v. Baker, 209 La. 1041, 26 So.2d 132 (1946); LeBleu v. Savoie, 109 La. 680, 33 So. 729 (1903); cf. Reid v. Phillips, 177 La. 497, 148 So. 690 (1933).
There are, -however, a number of loose references in Louisiana decisions to “constructive trusts”. McClendon v. Bradford, 42 La.Ann. 160, 7 So. 78, 8 So. 256 (1890); Gervais v. Gervais, 9 Orleans App. 69 (1911); Gaines v. Chew, 2 How. 619, 650, 11 L.Ed. 402 (U.S. 1844); Berthelot v. Isaacson, 5 Cir. 1922, 278 F. 921, 923. A result similar to the common law constructive trust has been attained in Louisiana decisions holding that title to movable property which is acquired by an agent through a breach of his fiduciary duty inures to the benefit of the principal. Sentell v. Richardson, 211 La. 288, 29 So.2d 852 (1947); noted in 22 Tulane L.Rev. 196, and 8 La. L.Rev. 223 (1948) (purchase of hospital stock). Or when an agent acquires his principal’s property by fraud or error. Assunto v. Coleman, 158 La. 537, 104 So. 318 (1925) (agent purchased principal’s property at judicial sale).
Mansfield Hardwood Lumber Co. v. Johnson, 5 Cir. 1959, 268 F.2d 317, 319, 324, is a good example of federal-court handling of Louisiana decisions in this area of the law. There this Court agreed “that the Louisiana Civil Law prohibits the imposition of a constructive trust or equitable lien on property”. *444The Court recognized however that under LSA-C.C. Art. 1847 “a breach of the fiduciary relationship is called fraud [not constructive fraud] and the remedy is, of course, a rescission of the contract or damages. By bringing such relationship under the broad heading of fraud, the Louisiana courts have, in effect, reached the same results as would be reached under the common-law-results which seem to common-law lawyers hard to obtain under a literal interpretation of the Civil Code.” Accordingly, in Mansfield the district court rescinded the sale of the plaintiff’s stock to the defendant, recognized the plaintiffs as the owners of the stock, and ordered the defendant to render an accounting to the plaintiffs.
All of this adds up to the fact that by different theories the civil law reaches many of the results the common law reaches. There is no exact civilian equivalent to the Angola-American resulting trust or constructive trust. Here, the claimants may suffer from the difference between the two legal systems. But the difference in remedies generally is not so great as to justify the majority’s far-out idea that Louisiana’s lack of resulting and constructive trusts, as the Lord Chancellor knows them, substantially interferes with the national policy on mineral reserves.

. “The common law is not a brooding omnipresence in the sky, but the articulate voice of some sovereign or quasi-sovereign that can be identified.” Southern Pacific Co. v. Jensen, 244 U.S. 205, 222, 37 S.Ct. 524, 61 L.Ed. 1086. cf. Clark, State Law in the Federal Courts: The Brooding Omnipresence of Erie R. Co. v. Tompkins, 55 Yale L.J. 205, 274 (1946).

. “Establishing a body of substantive law for federal courts in matters not otherwise of federal concern is not a legitimate end within the scope of the Constitution; thus to frustrate the ability of the states to make their laws fully effective in areas generally reserved to them would be inconsistent with the constitutional plan.” Friendly, supra, n. 3 at 397.

. Erie R. Co. v. Tompkins, 1938, 304 U.S. 64, 78, 58 S.Ct. 817, 82 L.Ed. 1188.

. United States v. Standard Oil Co., 1947, 332 U.S. 301, 308, 67 S.Ct. 1604, 91 L.Ed. 2067.

. “The issue that must be determined in each instance is what heed Congress intended to have paid to state law in an area where no heed need constitutionally be paid — more realistically, in Gray’s famous phrase, ‘to guess what it would have intended on a point not present to its mind, if the point had been present.’ We cannot expect that we shall always agree with the answer to such a question; we do have a right to expect that the question shall always be put.” Friendly, n. 3, at 410.

. Wechsler, The Political Safeguards of Federalism: The Role of the States in the Composition and Selection of the National Government, 54 Colum.L.Rev. 543, 545 (1954).

. In the instant case the entire title, legal and equitable, to the mineral leasehold passed at the time the lease was executed. In Irvine v. Marshall, on which the Court relied so strongly in the original opinion, the patent had not been issued to either of the competing parties. The Supreme Court recognized, however, that an entirely different rule would apply once legal title had in fact passed -from the United States:
“We hold the true principle to be this: that whenever the question in any court, State or Federal, is whether a title to land which was once the property of the United States has passed, that question must be resolved by the laws of the United States; but that whenever, according to those laws, the title shall have passed, then the property, like all other property in the State, is subject to state legislation, so far as that legislation is consistent with the admission, that the title passed and vested according to the laws of the United States.”
Pan American Petroleum Corporation v. Pierson, 10 Cir.1960, 284 F.2d 649, cert. denied, 366 U.S. 936, 81 S.Ct. 1661, 6 L.Ed.2d 848 supports Wallis’s position. The Court held that the Secretary has no “authority to cancel an oil and gas lease for fraud of a lessee precedent to lease issuance.” The Court said: “IT]he government, by the issuance of the lease, has performed the _ last act required of it to vest in the lessee the right to explore for, produce, market and sell the oil and gas underlying the leased premises.” 284 F.2d at 654. The effect of this decision is uncertain, however, in view of Boesche v. Udall, 1963, 373 U.S. 472, 83 S.Ct. 1373, 10 L.Ed.2d 491, holding that the Secretary has the administrative power, beyond § 31 of the Act, to cancel a lease because of an administrative error; § 31, allowing cancellation for the lessee’s non-compliance with any of the provisions of the lease, applies only to situations in which a valid lease has been issued. The Court in Boesche was aware of Pan American, but did not discuss the case and spoke only in terms of administrative error. See Miller, The Historical Development of the Oil and Gas Laws of the United States, 51 Col.L.Rev. 506, 530 (1963).

. Professor Hart comments: “But the decisions yield no simple rule of thumb for choosing. They cannot. Particularly is this so in the subtler situations in which federal legislation is building upon legal relationships established by the states and its power is one of characterization only and not of alteration of the substance of the relation. Federal tax law, for example, can say what state-created interests are to be taxed, and can characterize them in any way it chooses; but it cannot create the interests. Similarly, federal bankruptcy law can dissolve state-created interests in any way it thinks equitable; but it is hard to see how it can create, or recognize in liquidation, interests which never had any existence under state law.” Hart, The Relations Between State and Federal Law, 54 Col.L.Rev. 489, 535 (1954).

. Morgan, The Future of Federal Common Law, 14 Ala.L.Rev. 10, 31 (1964).

. Id. at 17.

. A note, The Competence of Federal Courts to Formulate Rules of Decision, 77 Harv.L.Rev. 1084, 1090 (1964) contrasts Francis v. Southern Pac. Co. with Regents of the Universal System v. Carroll, 338 U.S. 586, 70 S.Ct. 370, 94 L.Ed. 363: “The Supreme Court occasionally has been guilty of failure to inquire into the extent of the interest evinced by a federal statute ‘involved’ in a litigation. In Francis v. Southern Pac. Co., for example, * * *. In contrast with Francis, the Court made careful inquiry into the interest evinced by the legislation ‘involved’ in Regents of the Univ. Sys. v. Carroll. There it was held that although the Federal Communications Commission has authority to regulate the transfer of radio licenses, the construction of contracts transferring the control of a station or its property is governed by state law.” See also Wright, Federal Courts § 60 at 218.

. 333 U.S. at 450, 68 S.Ct. at 613.

. Note, The Competence of Federal Courts to Formulate Rules of Decision, 77 Harv.L.Rev. 1084, 1090 (1964). “Although Congress has in rare instances delegated to the judiciary the authority to create a comprehensive body of de-cisional law in a particular area, the role of the courts is ordinarily interpretative and implemental. The exercise of this judicial competence is premised on the inevitable incompleteness of legislation. A statute may be sufficiently vague that its application to a particular controversy is unclear; it may have omitted ancillary but necessary procedural rules; or it may have created a cause of action whose elements are defined only in general terms, leaving refinements to the judiciary. In these cases it is the task of the judiciary to fill in the legislative lacunae in the manner most compatible with the statutory framework. The scope of judicial lawmaking varies inversely with the clarity of the policies discernible from the statute and its legislative history, but judicial lawmaking competence is properly limited to issues in which the congressional program evinces a legislative interest.” Id. at 1089.