Court Opinion

ID: 8804851
Source: CourtListenerOpinion
Date Created: 2022-11-26 14:44:58.320007+00
Date Added: 2024-06-11T17:04:03.169879
License: Public Domain

GILBERT, Circuit Judge
(dissenting). In the first place, I think it is error to hold that the land in question was occupied under a location or claim “existing and valid” within the language of the exception found in the withdrawal order of September 27, 1909. The reasoning in United States v. McCutchen (D. C.) 234 Fed. 709, and United States v. Midway Northern Oil Co. (D. C.) 232 Fed. 619, is, I think, convincing.
In the second place, I think it extremely doubtful whether an association claim, such as that which is involved in the present case, is *531protected by the provisions of the Pickett Act of June 25, 1910, any further than that particular tract which may have been in the actual possession of a bona fide occupant or claimant, who, at the date of the withdrawal, was in the diligent prosecution of work leading to discovery of oil or gas. The notices of the location of the association claim involved in this case were filed in January, 1909. In June following the interests of all the persons who had filed the notices were transferred to McLeod. At that date no discovery had been made, and no work had been done. At the time of the withdrawal no work at all had been done on either of the auarter sections involved in these two suits, and no one was in diligent prosecution of work thereon leading to discovery of oil or gas. See United States v. Stockton Midway Oil Co. (D. C.) 240 Fed. 1010. An important distinction between these cases and the case of United States v. Grass Creek Oil & Gas Co., 236 Fed. 481, 149 C. C. A. 533, decided by the Circuit Court of Appeals for the Eighth Circuit, is that in the latter case, at the time of the withdrawal, all of the original locators of the association claim were in the actual possession by their lessee.
In the third place, the appeal presents the single question whether the court below, in appointing a receiver, abused the discretion which was vested in it. In Bosworth v. Terminal Rd. Ass’n, 174 U. S. 182, 186, 19 Sup. Ct. 625, 627 (43 L. Ed. 941), Judge Brewer said:
“But the appointment of a receiver is a matter resting largely in the discretion of the court — not, of course, an arbitrary, but a legal, discretion — and (depending, not simply upon the breach of a condition in the mortgage, but also upon the question of relative injury and benefit to the parties and the public by the taking of the property out of the possession of the mortgagor, and placing it in the hands of a receiver.”
In Hutchinson v. American Palace Car Co. (C. C.) 104 Fed. 182, 187, Judge Putnam said:
“The same principles apply with reference to the exercise of discretionary powers for the appointment of receivers as to the exercise of discretionary powers for preliminary injunctions.”
In Briggs v. Neal, 120 Fed. 224, 56 C. C. A. 572, the Circuit Court of Appeals for the Fourth Circuit held that the appointment of a receiver is discretionary, and will not be reviewed, unless a gross abuse of discretion is shown. And all the authorities hold that the appointment of a receiver pendente lite, like the granting of an interlocutory injunction, is a matter resting, with certain limitations, within the discretion of the court to which the application is made, to be governed by a consideration of all the circumstances in the case. The courts have always recognized the propriety of appointing receivers in mining property, where the substance of the property in controversy may be wasted by the extraction of ores. In High on. Receivers (3d Ed.) § 615, it is said:
“The aid of a receiver is sometimes granted in cases of mines or collieries pending a litigation which is to determine the title and rights of the parties, when, from the peculiar nature of the property, it .is necessary that it should be kept in operation and preserved pendente lite.”
In Elk Fork Oil & Gas Co. v. Foster, 99 Fed. 495, 39 C. C. A. 615, where the bill sought only an injunction, the Circuit Court of Appeals *532held that the District Court had the discretion on its own motion to appoint a receiver. The court quoted with approval from 15 Am. & Eng. Enc. of Law 605, the following:
“Working of mines is something more than the common and ordinary use of real estate, and required the use of more than ordinary remedies to protect the rights of a party entitled to the possession. The granting of an injunction, and, if necessary, the appointment of a receiver, are common remedies.”
The complaint in each of these cases involves a quarter section of land on which, at the time of tire withdrawal, no well had been commenced. The complaint distinctly charged that the location of the association claim, purporting to have been filed in the names.of Taylor, Powell, Darling, Pentz, Freeman, Thorne, Harder, and Searles, was in fact posted by and for the sole benefit of McLeod, and that the names of the locators were used to enable McLeod, or some other person than the locators, to acquire more than 20 acres of mineral land, in violation of the laws of the United States; that the said persons whose names were so used in said location notice were not bona fide locators, and each of them was without an interest in said location notice so filed, and their names were not used to enable them to secure said land, but that each was a mere dummy, used for the purposes alleged. The answers denied these allegations. The judge of the court below in his opinion stated that in his judgment the present status of the property in the cases should be maintained, either by enjoining the withdrawal of oil or by the appointment of a receiver, “until the right of defendants to withdraw oil from the land is finally determined, either by the Land Department or by the court. It seems to me that tíie appointment of a receiver will work less hardship to defendants than the granting of an injunction.”
The defendants in their answers pleaded the provisions of the Pickett Act, and alleged that they had acquired the association claim by complying therewith. The burden of proof was upon them to prove that this was true. On the hearing of the application for the receiver, they presented affidavits tending to show that it was true. Was the court below bound to accept those affidavits as final and conclusive, and therefore deny the application for a receiver ? I think not. Perhaps the members of this court would not have appointed a receiver upon the showing made, but that is not the question here. The question is whether the court below manifestly abused the discretion which was lodged in it. That court may have entertained the opinion of the meaning of the Pickett Act which I have outlined above. If it did, a clear case was made for the appointment of a receiver to prevent waste. It may have been of the opinion that the showing made by the affidavits, made as they were by interested parties, was not sufficient to prove the diligence which the Pickett Act required. If so, the appointment of a receiver was not an abuse of discretion. Lands which have ceased to be public lands, by reason of the initiation of pre-emption and homestead and other claims, are still so far public lands that the United States may protect them from waste. Shiver v. United States, 159 U. S. 491, 16 Sup. Ct. 54, 40 L. Ed. 231.