Pen-Ken Gas & Oil Corp. v. Warfield Natural Gas Co.

• Decision Date: 31 August 1943
• Docket Number: No. 9334.,9334.
• Citation: 137 F.2d 871
• Parties: PEN-KEN GAS & OIL CORPORATION v. WARFIELD NATURAL GAS CO.
• Court: U.S. Court of Appeals — Sixth Circuit

137 F.2d 871 (1943)

PEN-KEN GAS & OIL CORPORATION v. WARFIELD NATURAL GAS CO.

No. 9334.

Circuit Court of Appeals, Sixth Circuit.

June 1, 1943.

Rehearing Denied August 31, 1943.

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Gilbert F. Wagner, of Chicago, Ill., for appellant.

Harold A. Ritz, of Charleston, W.Va. (Dysard & Dysard, of Ashland, Ky., Wells & Wells, of Paintsville, Ky., and S. S. Willis, of Ashland, Ky., on the brief), for appellee.

Before SIMONS, ALLEN, and HAMILTON, Circuit Judges.

HAMILTON, Circuit Judge.

Appellant, plaintiff below, in its complaint alleged that it was the owner of a parcel of real estate lying in the counties of Knott, Floyd and Pike in the Commonwealth of Kentucky, consisting of approximately 300,000 acres and that its title to said lands grew out of an original grant issued February 16, 1797, to Benjamin Haskell by the Commonwealth of Virginia, and that beginning in 1930 and ever since, appellee, the Warfield Natural Gas Company, had illegally entered on said lands and drilled gas and oil wells and built thereon pumping stations and other structures and removed therefrom large quantities of natural gas of the fair market value of $70,466,900.00 and that appellee had ejected appellant from said lands. Appellant prayed for the possession of the real estate and that it recover of appellee, $70,466,900.00 in damages for its trespass. Appellee answered and set up eight affirmative defenses, among which it alleged that the Haskell patent which was the foundation of appellant's title was forfeited to the Commonwealth of Kentucky, under the Acts of the General Assembly, 1906 Session, c. 22, art. 3, p. 115, by a judgment of the Pike Circuit Court of the Commonwealth of Kentucky, entered February 20, 1908, in the case of Commonwealth v. Eastern Kentucky Coal Lands Corporation which judgment was affirmed by the Court of Appeals of Kentucky, 111 S.W. 362, and by the Supreme Court of the United States, 219 U.S. 140, 31 S.Ct. 171, 55 L.Ed. 137.

It further alleged that appellant had no right, title or interest in the properties described in the petition.

After appellee filed its answer, it invoked the summary procedure of Rule 56, Rules of Civil Procedure, 28 U.S.C.A. following section 723c, the motion being based on each of its affirmative defenses. Appellee filed in support thereof a complete transcript of the record from the Supreme Court of the United States in the case of Eastern Kentucky Coal Lands Corp. v. Commonwealth, which was a transcript of the record from the Court of Appeals of Kentucky in the same case, affirming the judgment of the Pike Circuit Court forfeiting to the Commonwealth the lands covered by the Haskell grant.

Appellee also filed a map showing the boundaries of the lands as claimed by appellant which coincided with the boundaries in the Haskell grant, and two affidavits of John D. Thomas, stating that he had checked the records of Pike and Knott Counties, Kentucky, from 1901 to 1940 and found no record of any assessment of the Haskell grant, except in 1905 on the nonresident assessment book of Pike County, a fragmentary reference to one Charles Seldon, as being assessed for 15,000 acres with a marginal notation of B. Haskell. Thomas also filed copies of the deeds of February 26, 1931, and of June 30, 1931, under which appellant claims to have acquired title. He filed copy of a map found in the office of the Pike County Clerk, showing that the old Haskell grant was subdivided and sold in Buchanan County, Virginia. Appellee also filed affidavit of Gomer C. Sturgill, Tax Commissioner of Floyd County, stating that from 1917 to 1940 no one listed or paid taxes on any of the lands covered by the Haskell grant under the name of its alleged owners.

Appellant filed a motion to strike appellee's motion and all papers and affidavits in support thereof and a counter motion for a summary judgment and in support of this motion, appellant filed a certified copy of the assessment roll of Pike County showing that the part of the Haskell grant lying in Pike County was duly assessed for taxes in the years 1903, 1904 and 1905. It also filed the affidavit of Nels T. Arvidson in which he stated that he had seen duly issued tax receipts evidencing the payment of taxes on the Haskell grant in Pike County, covering the years from 1895 to 1908 inclusive and which tax receipts, with the exception of the year 1900, were in the possession of one of three people, no one of whom he had been able to locate but if given a reasonable time, he could produce the receipts. Arvidson had in his possession and filed with his affidavit a tax receipt issued by the Sheriff of Pike County evidencing the payment of taxes on the Haskell grant for the year 1900.

Appellant also filed the affidavit of J. J. Johnson who stated that he had made a careful examination of the records and files of the Pike County Circuit Court Clerk's office for the purpose of ascertaining whether there had been any sales of the lands covered by the Haskell grant for non-payment of taxes for the years 1900 to 1906, both inclusive, and that he had found nothing in the record showing such sales. This affiant further stated that he had examined the tax records in the Auditor's office of the Commonwealth of Kentucky and that they showed that taxes upon the lands of the Haskell grant lying in Pike County were paid for the years 1903, 1904 and 1905 and he filed with his affidavit an attested copy of the records of the Auditor's office showing these payments.

Appellant also filed the affidavit of Roy C. Holbrook who stated that he had made a careful examination of the deed books in Pike, Floyd, Knott and Letcher Counties, Kentucky, for the purpose of tracing the record title in these counties to the lands of the Haskell grant and that he had also examined the tax assessment rolls in Pike County, Kentucky, and found thereon notations showing that the lands of the Haskell grant were assessed in that county for taxes in the year 1905 in the names of Robert H. Boyd, Wilson H. Wilson and Marie A. Taylor, and that it was assessed for the years 1903 and 1904 inclusive, in the names of Charles Seldon, Robert Boyd and Marie A. Taylor. This affiant filed with his affidavit certified copies of the assessment rolls of Pike County, showing these assessments. This affiant also stated that he had examined all of the records commencing with the year 1878 to and including 1933 of Sheriff's land sales for taxes in Pike County, Kentucky, and that there was no recordation therein of sales of the Haskell tract by the Sheriff of the County for taxes for any of these years.

This affiant also stated that he had made a careful examination of the delinquent tax book in the Sheriff's Office for Pike Country for the years 1901 to 1907 inclusive, and that there was no record of any delinquency in the payment of taxes on the Haskell grant for any of these years in that County and that lie also examined the records of the Pike County Commissioner's report of land sales from 1859 to 1919, inclusive, and that there was no recorded sale of the Haskell grant, or that of any grantee or grantor in the chain of title of appellant in the Commissioner's report; that he had examined the records in the Pike and Floyd County, Courts of Miscellaneous Instruments and also the deed indexes in these counties and that he found no record of any forfeiture sale of the Haskell grant or any, record whatsoever in said books of the judgment in the case of Commonwealth of Kentucky v. Eastern Kentucky Coal Lands Corporation entered in the Pike Circuit Court, June 3, 1907.

This affiant further stated that he had made a careful examination of all the records of Pike and Floyd Counties in which the law of the Commonwealth of Kentucky requires the entry of sales of land for non-payment of taxes or their delinquencies and in none of these records was there any entry showing that the owners of the Haskell grant had failed to list these lands for taxation or that any part of them had been sold for the nonpayment of taxes, but on the contrary that the appropriate records showed that said lands had been listed and assessed for taxes for the years from 1900 to 1906, inclusive, and these records also showed that the taxes had been paid on these properties for the years from 1900 to and including 1906.

Based on the exhibits and affidavits, the trial court sustained appellee's motion for a summary judgment and found as a fact that the judgment of the Pike Circuit Court in the case of the Eastern Kentucky Coal Lands Corporation v. Commonwealth, Ky., 111 S.W. 362, affirmed by the Supreme Court in 219 U.S. 140, 31 S.Ct. 171, 55 L. Ed. 137, forfeiting the lands embodied within the Haskell grant to the Commonwealth of Kentucky was valid in all particulars and that appellant and its predecessors in title had no interest in the lands covered by the grant.

Appellant is here insisting that under the state of the record, the court was without jurisdiction to enter a summary judgment dismissing appellant's petition on the above ground.

Rule 56 is a procedural device for the disposition of cases in which there is no material issue of fact and its purpose is to eliminate the formal trial of cases where only questions of law are involved.

The court is authorized under the plain provisions of this rule to summarily determine whether or not a bona fide issue of fact exists between the parties to the action. A determination by the court that such issue is presented makes the rule inoperative. On the other hand, if the pleadings or other proof of either o the parties disclose that no real cause of action or defense exists, the court may determine that there is no issue to be tried by a jury and may grant a summary judgment.

Subparagraph (c) of the Rule provides that the summary judgment "shall be rendered forthwith if the pleadings, depositions, and admissions on file,...