Court Opinion

ID: 9450646
Source: CourtListenerOpinion
Date Created: 2023-08-04 16:54:04.823858+00
Date Added: 2024-06-11T17:32:24.376084
License: Public Domain

WISDOM, Circuit Judge
(dissenting).
I respectfully dissent.
In this case there is much to be said for drawing on the “federal common law” to determine the rights of the parties. After all, the parties claim under a lease from the United States. And, in the matter of equitable remedies, the law of the forum here differs importantly from the law of the rest of the States: the civil law does not recognize resulting trusts or constructive trusts, not at least as these great tools of justice are effectively used in other states to rectify the effects of bad faith.
But I can find no escape from the consequences of the fact that title to the lease in question passed from the United States to Wallis. See Hodgson v. Federal Oil & Development Co., 1927, 274 U.S. 15, 47 S.Ct. 502, 71 L.Ed. 901.
With due deference, it seems to me that Irvine v. Marshall does not compel an application of federal common law rather than the law of the forum. In that case no patent had yet issued to either the plaintiff or the defendant, and it was held that a state or territorial law could not be invoked to force the issuance of a certificate of title to one or the other of two 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.”
Here, the United States transferred all of its lease interest to Wallis. On December 19, 1958, the Department of the Interior issued a public domain lands *438lease to Wallis over a prior applicant, Morgan, whose bids did not contain a sufficient description of the land. After appeals to the district court and Court of Appeals for the District of Columbia, Morgan’s contentions were rejected and Wallis’s right to the government lease became final. McKenna v. Seaton, 1958, 104 U.S.App.D.C. 50, 259 F.2d 780, cert. den’d 358 U.S. 835, 79 S.Ct. 57, 3 L.Ed. 2d 71; Morgan v. Udall, 1962, 113 U.S. App.D.C. 192, 306 F.2d 799, 801, cert. den’d 371 U.S. 941, 83 S.Ct. 320, 9 L.Ed. 2d 275.
The case before the Court concerns a mineral lease and not a patent, but Pan American Petroleum Corporation v. Pierson, 10 Cir. 1960, 284 F.2d 649, cert. den’d 366 U.S. 936, 81 S.Ct. 1661, 6 L.Ed. 2d 848, makes it clear that there is no distinction between a patentee and a lessee of a mineral lease, as far as passage of title to the mineral is concerned:
“We deem it unnecessary to delve into the legal complexities as to whether an oil and gas lease grants a profit a prendre or creates an estate in land. Under the first theory the lessee gains title to the oil and gas after its severance and under the second the lessee has an ownership of the hydrocarbons in place. Under each theory the 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.”
Some of the decisions relied upon by the majority may be distinguished on the facts from this case. Thus, Widdicombe v. Childers, 1888, 124 U.S. 400, 8 S.Ct. 517, 31 L.Ed. 427 and similar cases are distinguishable in that the claimant “had acquired a prior right from the United States in force when his purchase was made under which his patent issued”. There is no question here, as there was in United States v. Louisiana, 1949, 339 U.S. 699, 70 S.Ct. 914, 94 L.Ed. 1216 and United States v. California, 1946, 332 U.S. 19, 67 S.Ct. 1658, 91 L.Ed. 1889, of the paramount power of the United States over the marginal sea. The issue is not one involving the State’s assertion of jurisdiction. There is no interference here with any overriding national interest. As in Bank of America National Trust & Savings Association v. Parnell, 1956, 352 U.S. 29, 77 S.Ct. 119, 1 L.Ed.2d 93, this litigation between private parties does not intrude upon national policy or the rights of the United States. When leasing its lands to individuals, unless there are special circumstances, the government acts in a proprietary capacity in the same way as does the private land owner. Camfield v. United States, 1897, 167 U.S. 518, 524, 17 S.Ct. 864, 42 L.Ed. 260.
If the law of the forum controls, as I think it does, although “the jurisprudence of this State has fluctuated in construing a mineral lease as being in essence a real right or a personal right, it 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; certified to Supreme Court and affirmed. Louisiana law, therefore, does not allow McKenna to prove his claim to a one-third interest in the title to the lease or allow Pan American to go beyond the terms of the option agreement. Whatever rights Mc-Kenna may have to an accounting for the profits resulting from a joint venture (see Hayes v. Muller), or otherwise, he cannot prove title to an interest in the lease itself by parol evidence. And whatever rights Pan American may have for damages for Wallis’s breach of covenant “to make diligent efforts” to accomplish the purpose of the option, the parol evidence rule bars a court enforced conveyance of a lease not covered by the option.
I would affirm the judgment of the district court, without prejudice to the plaintiffs’ rights, if any, to bring new and different actions, not based on McKenna’s claim to a one-third interest in the title to the lease and not based on Pan American’s claim to specific performance of the option.