Court Opinion

ID: 6830295
Source: CourtListenerOpinion
Date Created: 2022-07-23 19:51:11.513571+00
Date Added: 2024-06-11T16:04:32.457712
License: Public Domain

MILLER, District Judge.
This ease is here on appeal from an order of the lower court dismissing appellant’s bill for want of equity. His bill, filed May 26, 1922, sought to have appellees declared trustees for appellant to the extent of an undivided one-eighth interest in an oil and gas lease granted by the United States to the Federal Oil & Development Company, covering the southeast quarter of section 13, township 40 north, range 79 west, Natrona county, Wyo., and for an accounting. The facts alleged, omitting jurisdictional allegations and some details, are substantially as follows:
On January 11, 1887, the above-described quarter section was vacant and unappropriated domain of the United States, open to location, exploration, and purchase under the placer mining laws then in force. On that day George McManus, H. T. Snively, G. B. Hall, M. Iba, Perry Doan, William F. Ford, Martin Ashcraft, and Sam Bed-saul, all qualified so to do, did associate themselves together for the purpose of locating, holding, and working the said quarter section as an oil placer mining claim, and did so locate said premises as an association oil placer mining claim, by complying with all the laws, rules, and regulations, both federal and state, required to lawfully make such location, and thereafter did make discovery of valuable deposits of minerals, to wit, petroleum and other mineral oils, in and upon said premisés. That said claim is situated within the limits of the area embraced within the executive order of withdrawal issued by the President of the- United States under date of September 27, 1909, which said order of withdrawal was never recalled or revoked prior to the 25th day of February, 1920. That at the date of the executive order of withdrawal the said claim was a valid and subsisting mining claim under the mining laws of the United States. That the interest and estate of George McManus, his heirs, and this appellant in said premises have never been forfeited or abandoned. That George McManus died intestate on or about September 16,1901, leaving as his sole heirs at law the widow, Anna McManus, a daughter, Octavia Green, formerly Octavia McManus, and a grandson, Charles F. Trusty. The widow and daughter have never been citizens or residents of Wyoming and have never been within that state. The grandson was never in the state until-years immediately preceding the commencement of this action. None of them ever had any actual knowledge of the existence of said placer mining claim, or of the interest or title of George McManus therein, and no actual knowledge or information of any kind leading to knowledge of their rights in the premises, until February 11, 1922, and shortly afterward. That none of said heirs of said George McManus, deceased, had or acquired until February 11, 1922, any actual knowledge of the right and privilege granted them by the Act of Congress approved February 25, 1920 (Comp. St. Ann. Supp. 1923, §§ 4640%-4640%ff, 4640%g-4640%ss), known as the Oil Leasing Bill, to make application within six months after the approval of said act for and to be granted an oil and gas lease on said premises or for an undivided one-eighth part thereof, and granting and confirming to them as owners of the mining title under pre-existing placer mining laws the preferential right to an oil lease theretofore located as oil placer mining claims under the laws of the United States, upon which there had been discovered oil in substantial quantities prior to said executive order of with*444drawal. That on the said 11th day of February, 1922, the said heirs at law, for a valuable consideration paid to them by the appellant, by proper deeds of conveyance, duly sold and conveyed all their right, title, and estate in said premises to the appellant herein, who is now the owner and holder thereof.
During his lifetime McManus never -sold, conveyed, or incumbered his interest in said property, nor did any other person, lawfully authorized so to do, ever sell, assign, or convey the interest of said McManus in said premises, or any part thereof, to any person or corporation whatever. That on March 11, 1884, 'George McManus, Perry Doan, Sam Bedsaul, Scott Morford, James McFarland, William Hudson, and William Meyers gave to Shepard Fales and Cy Iba a power of attorney to jointly locate for said principals oil placer mining claims in Carbon county, then territory of Wyoming, now Na-trona county, Wyo., and delegated the' power to said Fales and Iba to jointly sell and convey as agents of said principals such placer mines as might be located by them as attorneys in fact for their said principals. This power of attorney was never executed by Fales and Iba, but Cy Iba did attempt to exercise it on February 18, 1890, by executing a deed as the pretended attorney in fact of McManus and his coloeators of the said claim, purporting to convey to one Victoria A. D. Johnson an undivided one-half interest in said-premises. Fales did not join in this deed.
In- March, 1900, Ashcraft and Bedsaul conveyed to Cy Iba their interest in said premises. On April 12, 1905, Cy Iba, by a quitclaim deed stating on its face that it conveyed an undivided one-half interest, conveyed his interest to Joseph H. Lobell. On February 16, 1907, Victoria A. D. Johnson, by quitelaim deed purporting on its face to convey an undivided one-half interest in the premises, conveyed to Frederick J. Lobell her interest in said premises. Two days later by similar quitclaim deed Frederick J. Lobell conveyed the same to Joseph H. Lo-bell, his brother. ' On August 16, 1915, Joseph H. Lobell conveyed all his interests thus received to the appellee, the Federal Oil & Development Company.
On May 15, 1918, the Federal Oil & Development Company applied for a mineral patent to the premises. This application was adversed by the United States and the application withdrawn on March 25, 1920, about one month after the passing of the Oil Leasing Act, approved February 25, 1920. In considering -that application for a mineral patent the General Land Office found as a matter of law that George McManus owned at that time an undivided one-sixteenth interest in the said placer mining claim, but afterwards, on the application of the appel-lee, the Federal Oil & Development Company, for the oil lease in question here, reversed that decision, and held that all of the title of McManus had passed to the Federal Oil & Development Company by purchase. That in so holding and granting the said lease to the Federal Oil & Development Company the Commissioner of the General Land Office and Secretary of the Interior mistook,misconstrued, and misapplied the law applicable to undisputed facts before them, and by reason of such mistake, misconstruction, and misapplication of the law applicable thereto, granted the said oil and gas lease to said appellee the Federal Oil & Development Company. That the appellees, and eaeh of them, had full knowledge and notice, actual and constructive, of the claim, right, title, interest, and, estate of the said George Mc-Manus, his heirs, and their successors in interest in and to an undivided one-eighth interest in said premises and -the oil contents thereof, and of their right under the law to an undivided one-eighth interest to any oil and gas lease of said premises that might be granted by the United States under the provisions of the Act of Congress approved February 25, 1920.
That appellant’s grantors at the date' of said lease were, and this appellant is now, a eotenant of the said appellees, and eaeh of them, in said leased premises and leasehold under said oil and gas lease granted to the said appellee the Federal Oil & Development Company, and is entitled to an undivided one-eighth interest' in and to the said oil and gas lease and the oil extracted therefrom, subject to the ’deduction and payment of the cost and expense of development, operation, production, and the payment of the royalty to the United States. That said appellees hold any and all oil that has heretofore been and may hereafter be produced and sold from said premises as trustees for this appellant. That the appellees are in actual possession of said premises under said lease and now engaged in extracting oil therefrom in large quantities, selling the same, and appropriating to their sole use the net proceeds of said oil and excluding the appellant from any interest or share therein and refusing to recognize the rights of the appellant therein. That appellant offers to do equity in the premises, and is willing to do and *445perform all acts and things that may be required of him by the court as a condition to granting the relief sought in this action, conformable to the rules and practice of equity.
On August 21, 1920, the Federal Oil & Development Company applied for an oil and gas lease to the premises under the provisions of section 18 of the Act of Congress of February 25, 1920 (Comp. St. Ann. Supp. 1923, § 4640141), and those proceedings culminated in the issuance of an oil and gas lease to the appellee, the Federal Oil & Development Company on March 25, 1921, which company on April 28, 1921, assigned a fraction thereof to the appellee the Mountain & Gulf Oil Company.
Appellant prays judgment that he be decreed to be the owner of an undivided one-eighth interest in and to said leased premises, and of an undivided one-eighth interest in all petroleum, oil, gas, and other mineral contents of said premises for and during the term of the lease, renewals, and extensions thereof, and of an undivided one-eighth interest in all oil extracted and produced therefrom by the appellees as trustees for the appellant. That appellees be ordered to execute and deliver to appellant a proper instrument of assignment conveying an undivided one-eighth interest in and to said oil and gas lease, and appellees be ordered to account to appellant for all oil produced from said leased premises or the proceeds thereof.
To this bill appellees filed identical motions to dismiss on the following grounds: (1) That the bill fails to state facts sufficient to constitute a cause of action; (2) that the appellant has been guilty of laches; (3) that the relief is barred by the limitations contained within the Act of Congress of February 25, 1920; (4) the statutes of limitations of the state of Wyoming; (5) a final determination and adjudication of all matters in controversy between the appellant and the appellees by the Secretary of the Interior of the United States against all rights claimed by appellant; and (6) that the United States is an indispensable party to the action.
On the 16th day of December, 1922, after argument, the court sustained said motions and entered its order dismissing the said bill, to which order the appellant duly excepted. Appellant alleges and specifies error on the part of the trial court in sustaining said motions on each and every ground thereof.
Appellant’s contention is that the Land Commissioner and Secretary of the Interior misapplied, mistook, and misconstrued the law applicable to the facts before them, in finding and concluding as a matter of law that the several conveyances set forth in appellant’s bill conveyed to and vested in the appellee the Federal Oil & Development Company the interest and estate of George McManus in the premises described about August 26, 1915, and that the mining title to said premises was not in issue, and further that the title held and possessed by the appellee the Federal Oil & Development , Company, at the date of its application for the lease in question, was sufficient in law to entitle it to the lease issued under the provisions of law applicable thereto, and that the quitclaim deed of the Federal Oil & Development Company to the United States conveyed and relinquished to the United States the interest and estate of George McManus, and that it was by reason of such misconstruction and misapplication of the law that the lease in question was granted to the said appellee; that as a matter of fact and as a matter of law it appears from the bill that prior to and on the date of appellee’s (the Federal Oil and Development .Company’s) application for and the date of the granting to said ap-pellee by the United States of the oil and gas lease in question, appellant’s grantors and appellee the Federal Oil & Development Company were eotenants of the premises described-in his bill, appellant’s grantors owning an undivided one-eighth interest therein that because of said cotenancy the rights, interests, and estate acquired by the appellee the Federal Oil & Development Company under said lease inured to the benefit of all eo-tenants, and, therefore appellant, as owner of the McManus undivided one-eighth interest in said premises, is entitled to have said lease impressed with a trust to that extent.
It is not pretended that the alleged mistakes of law set forth in the bill invalidate the lease or prevent the passing of the title to the lessee. The contention is that the facts alleged are sufficient in equity to justify a court of. equity to impress the lease with a trust in favor of appellant.
Section 18 of the Oil Leasing Act, approved February 25, 1920, provides the sole conditions upon which a lease under any circumstances could have been issued to appellant or his predecessors. The applicable portion of that section is as follows:
“That upon relinquishment to the United States, filed in the General Land Office within six months after the approval of this act, of all right, title, and interest claimed and possessed prior to July 3, 1910, and continuously since by the claimant or his predeees*446sor in interest under the pre-existing placer mining law to any oil or gas bearing land upon which there has been drilled one or more oil or gas wells to discovery embraced in the executive order of withdrawal issued September 27, 1909, * *' * and upon payment as royalty to the United States of an amount equal to the value at the time of production ofone-eighth of all the oil or gas already produced, * * * shall be entitled to a lease thereon from the United States for a period of twenty years. * * 31 All leases hereunder shall inure to the benefit of the claimant and all persons claiming through or under him by lease, contract, or otherwise, as théir interest may appear. * * * jy
Section 32:
“That the Secretary of the Interior is authorized to prescribe necessary and proper rules and regulations and to do any' and all things necessary to carry out and accomplish the purposes of this act.” Comp. St. Ann. Supp. 1923, § 4640%pp.
Section 24%, Regulations of the Secretary of the Interior, under date of March 11, 1920, provides:
“All proper parties to a claim for relief under sections 18,19, or 22 of the act, should join in the application, but, if for any sufficient reason that is impracticable, any person claiming a fractional or undivided interest in such claim may make application for a lease or permit, stating the nature and extent of his interest, and the reason for non-joinder of his co-owner or eo-owners. In eases where two or more applications are made for the same claim or part of a claim, leases or permits will be granted to one or more of the claimants, as the law and facts shall warrant and shall be deemed just.”
It therefore appears that before ap-' pellant or his predecessors in interest would be entitled to any lease from the government for any interest in said premises, he or they must, within six months after February 25, 1920, have relinquished to the United States all their right, title, and interest claimed or possessed prior to July 3,1920, and continuously since by such applicant or his predecessors in interest under the pre-existing mining law to any oil or gas bearing land embraced in the executive order of withdrawal of September ,27, 1909, and have paid to the United States as royalty an amount equal to the value at the time of production of one-eighth of all the oil or gas already produced. Neither compliance or attempted compliance with sudh conditions are alleged or pretended but the bill expressly negatives such facts. It is, however, alleged in the bill that appellant’s grantors were without actual knowledge of the provisions of section 18 of the Leasing Act until February 11,1922, and appellant argues that such lack of actual knowledge in some equitable manner operated to suspend the six months limitation provided for in said act. We think a sufficient answer thefeto is that the statute makes no such exception; but see Madden v. Lancaster County, 65 F. 188, 194-195, 12 C. C. A. 566; U. S. v. Missouri Pac. Ry. Co., 213 F. 169-173, 130 C. C. A. 5.
The question then under the third ground of the motions is narrowed to whether the appellant may impose a trust on a leasehold that neither he nor his grantors at any time were or now are entitled to receive, or any part thereof, from the lessor. We think the law on this question is well settled. The rule is aptly stated in Anicker v. Gunsburg and Others, 246 U. S. 110, 38 S. Ct. 228, 62 L. Ed. 603, where it is said:
“In order to maintain a suit of this sort the complainant must establish not only that the action of the Secretary was wrong in approving the other lease, but that the complainant was himself entitled to an approval of his lease, and that it was refused to him because of an erroneous ruling of law by the Secretary.”
See, also, Duluth & Iron Range Railroad Co. v. Roy, 173 U. S. 587, 19 S. Ct. 549, 43 L. Ed. 820; Bohall v. Dilla, 114 U. S. 47, 5 S. Ct. 782, 29 L. Ed. 61.
Because the bill fails to allege compliance or an attempt to comply with the requirements of section 18 of the Act of Congress approved February 25, 1920, it does not state a cause of action in equity, and therefore was properly dismissed for want of equity under the third ground of the motions to dismiss. That being true, other questions raised and argued do not require our consideration.
The order of the lower court is affirmed.