Ancora Corp. v. Miller Oil Purchasing Co.
| Decision Date | 30 June 1978 |
| Parties | ANCORA CORPORATION, a corporation v. MILLER OIL PURCHASING COMPANY, a corporation and Ancora-Citronelle Corporation, a corporation, et al. S.C. 2811. |
| Court | Alabama Supreme Court |
Robert E. Gibney of Kilborn & Gibney, Mobile, for appellant, Ancora corp.
Irvin J. Langford and John L. Lawler of Howell, Johnston, Langford, Finkbohner & Lawler, Mobile, for appellee, Miller Oil Purchasing Co.
Willis C. Darby, Jr. and Paul D. Myrick of Darby & Carrigan, Mobile, for appellee, Ancora-Citronelle Corp.
A. Charles Freeman, Asst. Atty. Gen. of Ala., University, Ala., for amicus curiae, State Oil and Gas Board of Alabama.
In February 1975, Miller Oil (a Mississippi corporation) (hereinafter Miller), initiated this litigation against (a) Ancora-Citronelle Corporation (hereinafter Ancora-Citronelle), (b) Ancora Corporation (hereinafter Ancora), and (c) numerous other parties who were sued collectively as a defendant and who owned an overriding royalty interest in certain wells situated in the East Citronelle Unit of the Citronelle Oil Field in Mobile County (hereinafter referred to as Royalty Owners).
Miller, in its complaint, sought a declaratory judgment of its right to recover from one of the three defendants identified above, monetary damages in the approximate amount of $83,000, representing an alleged overpayment for oil purchased by it from Ancora-Citronelle, as unit manager of the East Citronelle Unit, which had appropriated the oil from the wells in which Ancora and the Royalty Owners owned an interest in the East Citronelle Unit. Miller alleged, alternatively, different theories of relief which in its opinion authorized recovery against one of the defendants.
In support of its legal position that Ancora-Citronelle was liable for such overpayment, Miller alleged that Title 26, Section 179(72)(g) of the Code of Alabama (Recomp.1958), now Title 9-17-83(7) of the Code of Alabama of 1975 (), which requires the State Oil and Gas Board of Alabama (hereinafter referred to as Board) in approving any unitization of oil and gas properties to include within its order a provision for appropriation of oil without prior notice or opportunity to be heard, was unconstitutional as being in violation of due process of law and that Ancora-Citronelle, as the party who ordered the unlawful appropriation, was responsible to Miller.
In the event the statute was found to be constitutional, Miller alleged that Ancora was responsible for the overpayment inasmuch as the funds paid for the appropriated oil were applied to an indebtedness allegedly owed by Ancora to Ancora-Citronelle and that Ancora should reimburse Miller for such payment.
Finally, Miller alleged that in the event neither Ancora-Citronelle nor Ancora was responsible that it had paid the royalty owners their interest when it was not legally obligated to do so, and was hence entitled to recover back from them collectively the overpayment.
Furthermore, in its complaint, Miller admitted and has at all times during this litigation admitted owing to Ancora the approximate sum of $63,000 for oil purchased unassociated with and not produced from the East Citronelle Unit, and in the event the trial court determined Ancora not to be responsible to Miller, Miller offered to return the money to Ancora. In the event Ancora was found legally liable, Miller offered to offset its indebtedness to Ancora.
All the defendants who answered Miller's complaint denied all liability to Miller, and Ancora filed a counterclaim seeking to recover compensatory damages from Miller, including the monies Miller admitted it owed to Ancora. In an amended counter-claim, Ancora also sought the imposition of punitive damages. In its amended answer, Ancora joined in with Miller in asserting that the appropriation statute was unconstitutional.
Miller, Ancora-Citronelle and Ancora all filed motions for summary judgment seeking specific relief in this matter: Miller seeking to recover from Ancora; Ancora-Citronelle seeking to be dismissed from the litigation; and Ancora seeking to recover its monies from Miller. No royalty owner, individually or on behalf of all royalty owners, filed for summary judgment. No testimony was offered at the hearing conducted on the motions, and the trial court's ruling is based upon the pleadings, affidavits and other documents within the record.
On June 23, 1977, the trial court entered an order finding (1) that the appropriation statute was constitutional, specifically holding on the basis that no "state action" was involved in the oil appropriation, and (2) granting summary judgment to...
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