Sinclair Refining Co. v. Burroughs

• Decision Date: 20 January 1943
• Docket Number: No. 2537-2539.,2537-2539.
• Citation: 133 F.2d 536
• Parties: SINCLAIR REFINING CO. et al. v. BURROUGHS et al. RAWLINGS et al. v. SAME. REZAC et al. v. SAME.
• Court: U.S. Court of Appeals — Tenth Circuit

133 F.2d 536 (1943)

SINCLAIR REFINING CO. et al. v. BURROUGHS et al. RAWLINGS et al. v. SAME. REZAC et al. v. SAME.

Nos. 2537-2539.

Circuit Court of Appeals, Tenth Circuit.

January 20, 1943.

Robert M. Williams, of Oklahoma City, Okl. (Edward H. Chandler and Ralph W. Garrett, both of Tulsa, Okl., on the brief), for appellants Sinclair Refining Co. and Commonwealth Transp. Co. in No. 2537.

Ray S. Fellows, of Tulsa, Okl., for appellant Stanolind Pipe Line Co. in No. 2537.

Breck Moss, of Oklahoma City, Okl. (Hal Johnson, of Oklahoma City, Okl., on the brief), for appellants in No. 2538.

R. M. Rainey, of Oklahoma City, Okl. (Streeter B. Flynn and R. M. Rainey, Jr., both of Oklahoma City, Okl., on the brief), for appellants in No. 2539.

Byron Lamun, of Shawnee, Okl. (Claude Hendon, of Shawnee, Okl., on the brief), for appellees in Nos. 2537, 2538, and 2539.

Before PHILLIPS, BRATTON and HUXMAN, Circuit Judges.

HUXMAN, Circuit Judge.

J. E. Burroughs, Trustee of the estate of David D. Aitken, deceased, instituted this action in the District Court of the United States for the Western District of Oklahoma against the Board of County Commissioners of Pottawatomie County, Oklahoma, seeking recovery of $9,000, the par value of nine drainage district bonds, held by him, together with interest thereon. The ground on which the action was predicated was that the County Commissioners negligently failed to collect assessments, misappropriated proceeds from the sale of time warrants issued and sold for the part of the assessment levied against the county as a whole, and in some instances canceled assessments on property in the benefit district chargeable with the cost of the improvement, and the payment of the bonds issued therefor. That as a result thereof the county became liable to appellee for the face value of the bonds and accrued interest thereon.

The petition also named Elbert F. Rawlings, Mrs. Elbert F. Rawlings, his wife; Cecilia Rezac; Aloysuis A. Schroepfered; Frank A. Schroepfered; Mary S. Schroepfered; August M. Schroepfered; Michael C. Schroepfered; Anna N. Schroepfered; William C. Schroepfered; Ester C. Schroepfered; and Frank Schumacher, as parties defendant. No personal judgment was asked against them. As to them, the petition alleged that they were the owners of property subject to valid liens, which liens had been wrongfully canceled by the Board of County Commissioners. Plaintiff asked for a declaratory judgment establishing the validity of the original assessments levied on their properties.

While appellants Sinclair Refining Company and the Stanolind Pipe Line Company were not formally named as parties defendant, plaintiff did ask a declaratory judgment against them establishing a lien against their property for the assessments levied against it in favor of the county.

The prayer of the petition was for judgment as follows: (1) That plaintiff have judgment against the county for $9,000 with interest thereon; (2) that the county be adjudged liable for the time warrants the proceeds of which were misappropriated, and that the drainage district sinking fund be entitled to recover such amount from the county; (3) that the original assessments on certain described tracts of real estate belonging to individual defendants which had been canceled constituted liens against said lands subject only to the lien of the state for ad valorem taxes; (4) that the assessment made against the Prairie Pipe Line Company and the Sinclair-Prairie Pipe Line were legal and valid liens on the property of said corporations; (5) that upon payment of the amount due plaintiffs, the county should be entitled to a lien upon the real estate of the individual defendants and on the property of the pipe line companies; (6) that the time warrant undisposed of be sold or cashed by the county commissioners and the proceeds applied on the judgment rendered in favor of plaintiffs and that a judgment assessment be levied against the property on the tax rolls of the entire county to pay the difference between said amount and the total amount of the time warrants misapplied by the county commissioners; and (7) that all funds realized be first applied to the satisfaction of plaintiff's judgment and that the excess, if any, be set aside by the treasurer as a special trust fund to be repaid to the landowners in the district for any sums paid by them on the levy made by the county to pay the judgment rendered in certain other cases.

In its answer, as finally amended, the county prayed that if plaintiff recover judgment it be paid out of any money in the hands of the county belonging to the benefit district fund, and that as to any unpaid portion the court establish a lien in favor of the county against the property of the two pipe line companies, with the right to enforce the same as by law provided with reference to tax liens. It did not join in the prayer of plaintiff to establish a lien against the property of the individual defendants.

The court gave plaintiff judgment against the Board of County Commissioners for $10,350 and interest, and provided that the judgment should run against the county and not against the lands in the drainage district and that it be paid by the county as other judgments are paid by it. Further judgment was entered, holding valid the assessments against the lands of all the other defendants, that the same constituted valid liens against the lands of such defendants; that the liens established were for the benefit of the county to reimburse it, when collected, for payment of the judgment entered against it in favor of plaintiff, and that the liens be collected as delinquent taxes under the laws of the state.¹

Was plaintiff entitled to a declaratory judgment against the defendant property owners in the drainage district adjudicating the validity of assessments on their property? The declaratory judgment act, 28 U.S.C.A. § 400, created no new substantive rights. It is procedural in nature, designed to expedite the establishment of rights between parties when an actual justiciable controversy exists between them as distinguished from a hypothetical or abstract question or controversy. The declaratory judgment must establish rights and declare liabilities which as a result thereof may be enforced by the prevailing party against the loser in a subsequent action.

Tested by this rule, plaintiff's petition failed to state a justiciable controversy upon which a declaratory judgment might be based. Plaintiff sought to establish no claim for relief against the defendants other than the county. Neither did he seek or assert any relief dependent upon the status of the special benefit assessments on any property in the benefit district. He did not seek the collection of any special assessments or the sale of property subject to liens for delinquent assessments or the establishment of liens to make available funds for the payment of his bonds. The only relief he sought was a judgment against the county to be satisfied by a judgment levy on property within the county. Under these conditions a declaratory judgment adjudicating the status of the liens would merely settle a hypothetical abstract question of law. It would settle no question upon which any right he asserted against the defendants depended.

Whether the right of way of the pipe line companies is subject to special benefit assessments presents a serious question. Sec. 331, Title 82 O.S.A., directs that the assessments be placed on all lands benefited by the improvement. The terms "lands" and "real estate" as used in the Oklahoma statutes are not synonymous terms. Section 5 of Title 60 O.S.A., defines "real property" as consisting of:

"1. Land.

"2. That which is affixed to land.

"3. That which is incidental or appurtenant to land.

"4. That which is immovable by law."

Section 6 of the same Title defines lands as follows:

"Land is the solid material of the earth, whatever may be the ingredients of which it is composed, whether soil, rock or other substance."

Having defined the terms "land" and "real property," it must follow that when the law making body of the state uses one or the other of these terms, it uses them in the sense in which it had defined them. The applicable statute having directed that the assessment shall be levied on the land benefited by the improvement, it follows that the interests of the pipe line companies can be assessed only if they fall within the term "land" as it has been defined by law.

The cases cited by the county to sustain the assessments, as well as those upon which the trial court based its opinion, are not strictly in point. An analysis of them reveals that in every instance they involve statutes authorizing assessments on real estate. In Empire Natural Gas Co. v. Southwest Pipe Line Co., D.C., 25 F.2d 742, the court construed section 1153, Revised Laws of Oklahoma, 1910, 16 O.S. 1941 § 14, which provides that: "The words `land,' `real estate' and `premises' when used herein or in any instrument relating to real property, are synonyms * * *." Standard Pipe Line Company v. Index-Sulphur Drainage Dist., 173 Ark. 372, 293 S.W. 1031, held that: "Right of way in pipe line held subject to assessment as real property * * *." Tide Water Pipe Company, Ltd., v. Berry, Collector, 53 N.J.L. 212, 21 A. 490, held that the grant of the pipe line right of way constituted a fee and was taxable under the definition of "real estate" contained in the statute. The second paragraph of the syllabus in Swann et al. v. Washington Southern R. Co., 108 Va. 282, 61 S.E. 750, is as follows: "Under Code 1904, § 1105f(3)-(6), authorizing the condemnation of `lands or any interest or estate therein, or materials or other property,' an easement of right of way is subject to condemnation."

Had the legislature used either or all of the...