Wilkin v. Shell Oil Co.

• Decision Date: 11 June 1952
• Docket Number: No. 4298,4299.,4298
• Citation: 197 F.2d 42
• Parties: WILKIN et al. v. SHELL OIL CO. SHELL OIL CO. v. WILKIN et al.
• Court: U.S. Court of Appeals — Tenth Circuit

197 F.2d 42 (1951)

WILKIN et al. v. SHELL OIL CO.

SHELL OIL CO. v. WILKIN et al.

Nos. 4298, 4299.

United States Court of Appeals Tenth Circuit.

December 26, 1951.

On Rehearing June 11, 1952.

COPYRIGHT MATERIAL OMITTED

W. R. Withington and Wayne W. Bayless, Oklahoma City, Okl. (Gilliland, Withington & Shirk, all of Oklahoma City, Okl., H. D. Moreland, Tulsa, Okl., and L. G. Brewer, Elk City, Okl., on the briefs), for appellants and cross-appellees.

George W. Cunningham, Tulsa, Okl. (Mark Dunlop, Gordon Watts and Jesse M. Davis, all of Tulsa, Okl., on the briefs), for appellee and cross-appellant.

Before PHILLLPS, Chief Judge, and HUXMAN and MURRAH, Circuit Judges.

PHILLIPS, Chief Judge.

Shell Oil Company¹ brought this action against Wilkin and others to quiet the title to three oil and gas leases held by it on the following described lands, situate in Beckham County, Oklahoma, to wit:

The Southeast Quarter (SE¼) of Section Nine (9) and the Northwest Quarter (NW¼) of the Southwest Quarter (SW ¼) of Section Ten (10), Township Ten (10) North, Range Twenty-one (21) West, containing 200 acres.

The facts are not in substantial dispute. On January 11, 1929, C. C. Webb and Ruby I. Webb, his wife, gave a mortgage on the land to the Commissioners of the Land Office of the State of Oklahoma to secure an indebtedness of $3500. On August 7, 1931, C. C. Webb conveyed the land to Ruby I. Webb, subject to the mortgage to the State of Oklahoma.² The deed was made without consideration and Ruby I. Webb never claimed any equitable interest in the land.

On July 7, 1937, the Webbs, by mineral deed, conveyed an undivided one-half interest to the minerals in the land to W. E. Hocker. On July 8, 1938, Hocker, by mineral deed, in which his wife joined, conveyed an undivided one-fourth interest in the minerals in the land to J. G. Scott. On September 21, 1939, W. E. Hocker died testate. By his will, he devised all of his interest in the minerals in the land to Martha M. Hocker, his widow, and Walter E. Hocker, Jr., his son.

On March 25, 1940, C. C. Webb executed and delivered a quitclaim deed to Wilkin. Ruby I. Webb did not join in that deed. Wilkin immediately entered into possession of the land and collected the rents and profits from the occupying tenant and remained in such possession, through the tenant, until December 8, 1941, when a receiver for the land was appointed in the foreclosure proceedings referred to, infra.

On November 18, 1941, the State commenced an action in the District Court of Beckham County, to foreclose the mortgage. To that action it made the Webbs, Wilkin, Martha M. Hocker, Walter E. Hocker, Jr., Scott, and others, parties defendant. In November, 1941, personal service of process in the foreclosure suit was obtained upon all the defendants thereto, with the exception of the Webbs and Wilkin. Service was made on the Webbs and Wilkin by publication. Copies of the petition and publication notice were mailed to the Webbs on May 1, 1943.

Wilkin was inducted into the military service of the United States on April 18, 1942. He was honorably discharged on February 21, 1946. A copy of the petition and a copy of the publication notice were not mailed to Wilkin and he had no actual notice of such suit until after his discharge from the military service.

On June 24, 1943, an attorney for the State in the foreclosure suit filed an affidavit in that proceeding in which he averred that he did not know and could not ascertain, by any means within his control or within the control of the State, whether Wilkin was or had been, within sixty days prior to the date of the filing of such affidavit, in the military or naval service of the United States, and in which he requested that an attorney be appointed to represent the interests of any defendants in the military or naval service within the meaning of 50 U.S.C.A.Appendix, § 520. The affidavit was false. The affiant knew, at the time he made it, that Wilkin was in the military service of the United States, that a copy of his address could be obtained, and that a copy of the petition and of the publication notice could be served upon him by mail.

On June 24, 1943, a judgment was entered in the foreclosure proceeding adjudging that the Webbs were indebted to the State in the amount of $6630.03 with interest thereon at ten per cent per annum from June 24, 1943, until paid, $23 abstract expense, $350 attorney's fee, and the costs of the action, and further adjudging that if the defendants failed, for a period of six months from the date of judgment, to pay the State the amount of such judgment, together with interest, costs, and attorney's fee, that an order of sale should issue directed to the Sheriff of Beckham County, commanding him to advertise and sell "without appraisement" the land to satisfy such judgment. Appraisal was expressly waived in the mortgage.

On January 24, 1944, an order of sale issued. The State was the successful bidder at the sale. On March 13, 1944, an order was entered confirming the sale and directing the Sheriff of Beckham County to issue to the State a deed to the land. On April 20, 1944, a Sheriff's deed was issued to the State, which was recorded April 24, 1944, in the records of Beckham County. Immediately thereafter, the State went into possession of the land under claim of title thereto.

On May 7, 1945, Carl S. Ford, acting for Shell, obtained from the State three oil and gas leases covering in the aggregate the 200-acre tract of land, each running for a period of five years and containing a provision for delay rentals and a provision that the leases should be void unless a well, producing oil or gas in paying quantities, should be completed on the land within the five-year period. The leases were duly recorded on July 14, 1945. On September 14, 1945, Ford assigned the leases to Shell. The assignments were duly recorded on October 5, 1945. Prior to the purchase of the leases by Ford on behalf of Shell, Shell examined an abstract of title to the land, which included a transcript of the foreclosure proceeding. Shell relied upon the validity of the judgment rendered in the foreclosure suit.

On April 13, 1946, within 60 days after Wilkin was discharged from the military service, and within three years after the date of the foreclosure judgment, Wilkin filed an application in the foreclosure suit to set aside the Sheriff's deed, vacate the judgment, and permit him to redeem the land from the mortgage. In his application he alleged that at the time the foreclosure action was instituted he was the record owner of the land; that at the time the State filed its affidavit to obtain service by publication, he was in the active service of the United States Army, stationed at Fort Benning, Georgia; that he was inducted into the Army, April 18, 1942, at Fort Leavenworth, Kansas; was transferred to Fort Benning, Georgia, in December, 1942, transferred to Camp Wheeler, Georgia, in December, 1942, and transferred to the 96th Division in September, 1943; that on January 4, 1944, he embarked for the South Pacific combat area; that he returned to the United States, November 29, 1945, and was honorably discharged from the Army, February 21, 1946; that he did not receive a copy of the petition nor a copy of the notice of publication in the foreclosure suit and had no notice of such suit; that by reason of the foregoing facts, he was deprived of any opportunity of defending the foreclosure suit and of any opportunity to redeem the land from the judgment entered therein; that if the State had exercised due diligence and made reasonable inquiry, it could have ascertained the fact that he was in the military service and his address; that the foreclosure suit should have been stayed by reason of the provisions of 50 U.S.C.A.Appendix, § 520, and that by reason of the fact the proceeding was not stayed, he was deprived of any opportunity to defend the action and was prevented from redeeming the property from the foreclosure judgment.

He further alleged that after the issuance of the Sheriff's deed, the State, for a cash bonus of $3420, executed the three oil and gas leases on the land to Ford, that such leases were assigned by Ford to Shell, and that the State should be required to make an accounting of the rents and other moneys received from the land and of the bonuses and rentals received under the three oil and gas leases.

He prayed that the judgment in the foreclosure suit be vacated, the deed cancelled, and an accounting be had by the State for the amount of rents and other moneys received by it from the land.

On April 2, 1947, Wilkin filed an amended application to vacate the judgment and cancel the Sheriff's deed, which related to taxes, and in which he tendered to the State all taxes, interest, and penalties due on the land.

On May 13, 1948, Wilkin filed a second amended application to vacate the judgment and Sheriff's deed, in which he set up the judgment in the foreclosure suit, the order of sale, the sale, the order of confirmation, and the Sheriff's deed; and averred that, because of his military service, he was unable to redeem the property from the mortgage prior to the issuance of the order of sale, the Sheriff's sale, and the order of confirmation; and that if the judgment and sale were vacated he could and would tender into open court the amount due on the mortgage indebtedness, all taxes due on the property, and all costs and legal expenses due.

He further averred that the Sheriff's sale was made under an order of sale issued without appraisal; that under the statutes of Oklahoma, a foreclosure sale may not be made without appraisal until six months after the entry of the foreclosure judgment; that under the provisions of 50 U.S. C.A.Appendix, § 525, the period he was in the military service of the United States could not be included in computing such six months' period and that such six months' period did not expire until after...