Arkansas Louisiana Gas Company v. Kroeger

Decision Date17 May 1962
Docket NumberNo. 19328.,19328.
Citation303 F.2d 129
PartiesARKANSAS LOUISIANA GAS COMPANY, Appellant, v. H. A. KROEGER et al., Appellees.
CourtU.S. Court of Appeals — Fifth Circuit

Butler, Binion, Rice & Cook, Houston, Tex., Robert Roberts, Jr., Blanchard, Goldstein, Walker & O'Quin, Shreveport, La., Turner & Bankhead, Carthage, Tex., Cecil N. Cook, Fletcher H. Etheridge, Houston, Tex., William C. Perry, Houston, Tex., of counsel, for appellant.

Neal Powers, Carthage, Tex., Bradford Corrigan, Jr., Dallas, Tex., Golden, Croley, Howell, Johnson & Mizell, Dallas, Tex., by Lanham Croley and Bradford D. Corrigan, Jr., Dallas, Tex., for appellees Imperial Production Corporation et al.

Before TUTTLE, Chief Judge, and HUTCHESON and WISDOM, Circuit Judges.

HUTCHESON, Circuit Judge.

This appeal brought and allowed pursuant to Title 28 U.S.C. § 1292(b) from the order of the district court dated October 5, 1961,1 is presented as an agreed case on appeal pursuant to Rule 76 of the Federal Rules of Civil Procedure, 28 U.S.C.

The lawsuit, as the opinion and agreed case show, is an interpleader suit brought by Arkansas to determine title to a portion of the proceeds of the production of gas and condensate from a unit located in Panola County, Texas. The bill alleged that under the terms of written contracts, Arkansas has purchased, is continuing and will continue to purchase gas and condensate produced from said units, and Arkansas is obligated to pay, upon the terms and conditions therein set out, for gas and condensate purchased and delivered from said unit, and to pay the royalties on said gas and condensate to the owners thereof on behalf of the parties designated as the sellers in said contracts. Included within the description of the unit, as stated in its designation, is a certain tract of land of 184¼ acres, more or less, in Panola County, Texas (sometimes referred to as containing 183.98 acres of land). Arkansas purchases gas and condensate from a well which is located on another tract in said unit, and not on said 183¼ acres, more or less. The ownership of an undivided ¼ interest in and to the oil, gas and other minerals in and under, and that may be produced from said tract of 183¼ acres, more or less, is uncertain, and Arkansas has withheld and tendered into the registry of the District Court, under its first amended bill of interpleader or in the nature of interpleader, the purchase price of that portion of the gas and condensate produced from said unit attributable to an undivided ¼ of 183.98/643 of such gas and condensate. Such portion of such purchase price tendered and to be tendered into the registry of the district court are hereinafter collectively called the "Disputed Proceeds".

The bill further alleged that Arkansas is a neutral stake holder and has no interest in said tract of 184¼ acres, more or less, or in said Disputed Proceeds other than as the purchaser of gas and condensate from said unit and to be protected from a multiplicity of suits and from double or multiple payment of said Disputed Proceeds by a final judgment binding upon all necessary parties who have or claim, or may claim, an interest in or portion of said Disputed Proceeds.

In addition to numerous other defendants who own or claim royalty or mineral leasehold interests in said unit, Arkansas in its bill named as defendants herein more than 500 parties who constitute members of the Organization Board (or "Pre-Organization Board") of Universal Oil & Gas Co., investors in or shareholders of Universal Oil and Gas Company and creditors of said Board and said Universal Oil and Gas Company and who are all of the parties known to Arkansas who have or claim an interest in said Board or its assets or in said Universal Oil and Gas Company or its assets. Such parties are hereinafter for convenience collectively called the "Universal Claimants".

Two of the defendants, Lee B. Thompson, Trustee, and E. H. Patton, Jr., Ancillary Trustee, filed a motion that the district court enjoin and prohibit Arkansas from causing process in this case to be served upon the Universal claimants. In such a motion said trustee and said ancillary trustee alleged that they had been duly appointed and were acting under orders of the United States District Court for the Western District of Oklahoma (hereinafter referred to as the "Oklahoma Federal Court") and the United States District Court for the Southern District of Texas, respectively, as trustees, and in substance as equity receivers, of said Organization Board and Universal Oil and Gas Company, with the duty, interest, and authority to take possession of and preserve any interest which the Universal claimants may have in the property involved in this case, that they as such trustees are not adversely interested to said claimants but their interests are the same as theirs, and they fully and adequately represent all interests of all of the Universal claimants herein and, therefore, the Universal claimants named and sought to be served are not necessary or proper parties to this lawsuit. The trial court, after a full hearing in open court, by the order of October 5, 1961, held the Universal claimants not to be necessary or proper parties, granted said motion and enjoined Arkansas from causing process herein to be served upon the Universal claimants. This appeal from such order followed.

This is the way Arkansas in its brief states its position:

"Arkansas is a neutral stakeholder with no interest in said 184¼ acres, more or less, or the Disputed Proceeds other than as the purchaser of production and to be protected, from a multiplicity of suits and double or multiple payment of the Disputed Proceeds, by a final judgment in this case binding upon all necessary parties who have or claim or may claim an interest in or a portion of the Disputed Proceeds. If the Universal claimants are necessary parties to this case, Arkansas should not be prohibited from causing process herein to be served upon them. If they are not necessary parties, Arkansas does not desire to have them served. Accordingly, Arkansas does not affirmatively assert that the district court erred in entering the Stay Order, but submits that the question whether the Universal claimants are or are not necessary parties is not free from doubt and should be determined by this Honorable Court for the protection of Arkansas and the other parties herein. The question presented on this appeal is whether the district court erred in holding the Universal claimants are not necessary parties to this cause and in granting the Stay Order prohibiting service of process upon them herein."

Appellees, in their brief, thus state their position:

"The question presented on this appeal is correctly stated in appellant\'s brief as follows: `Whether the district court erred in holding that the Universal claimants are not necessary parties to this cause and in granting the Stay Order prohibiting service of process upon them herein\'. Appellees contend that the Universal claimants are not necessary parties and that the district court did not err in granting the Stay Order.
"The Universal claimants are not necessary parties to this cause because their interests are adequately represented herein by Lee B. Thompson, Trustee, and E. H. Patton, Jr., both of whom are equity receivers appointed for the purpose of managing and preserving the assets of the Universal Oil and Gas Company for the rightful owners thereof and for the purpose of representing the interests of the owners in connection with such properties.
"The rule is well established that where a receiver is appointed by a Federal District Court, persons who are parties to such proceeding or who claim an interest in the assets of the receivership estate, are not necessary parties to any other proceeding to which the receiver is a party, their interests being adequately represented therein by the receiver. Further such persons are bound by a judgment rendered in any proceeding to which the receiver is a party. Atlantic Trust Co. et al. v. Dana et al., 128 F. 209 (8th Cir., 1903); Manhattan Trust Co. et al. v. Chicago Elect. Traction Co., 188 F. 1006 (N.D.Ill., 1910); Texas & Pac. Ry. Co. v. Griffin et al., 76 Tex. 441, 13 S.W. 471 (1890); Davis v. Gray, 83 U.S. 203, 21 L.ed. 447 (1873); Doggett v. Florida Ry. Co., 99 U.S. 72, 25 L.ed. 301 (1878); Southern Expressway Co. v. Western N. C. Railway Co., 99 U.S. 190 191, 25 L. ed. 319 (1878).
"Appellant, in its brief, acknowledges the above stated rule, but asserts that the rule presupposes a valid appointment of a receiver. Appellant then suggests that the validity of the appointment of each of Lee B. Thompson, Tr. and E. H. Patton, Jr., Ancillary Trustee, is questionable, because their predecessor, Fred P. Branson, was initially appointed as receiver of the properties of the Universal Oil & Gas Co. and of the Organization Board of said company upon notice to the members of said Board but without notice to the investors,
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    • United States
    • U.S. District Court — Northern District of Ohio
    • May 23, 1992
    ...may be appointed regardless. See Shapiro v. Wilgus, 287 U.S. 348, 53 S.Ct. 142, 77 L.Ed. 355 (1932); Arkansas Louisiana Gas Co. v. Kroeger, 303 F.2d 129, 132 (5th Cir.1962) ("The power to make an ex parte appointment is properly exercised when the receivership is required by some urgent Whi......
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    ...that, in the receivership context, notice must ordinarily be given before appointment is made. See, e.g., Arkansas Louisiana Gas Co. v. Kroeger, 303 F.2d 129, 132 (5th Cir. 1962) ("[A]s a general rule a receiver should not be appointed without notice to the parties to be affected by the rec......
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    ...also exercise their equitable powers to appoint a temporary receiver in the absence of service. See, e.g., Arkansas Louisiana Gas Co. v. Kroeger, 303 F.2d 129, 132 (5th Cir. 1962) ("[A] court of equity does have the power and authority to make an ex parte appointment of a receiver.") (citat......
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