Atchley v. Varner
| Decision Date | 17 September 1929 |
| Docket Number | Case Number: 18534 |
| Citation | 1929 OK 320,280 P. 616,138 Okla. 156 |
| Parties | ATCHLEY v. VARNER. |
| Court | Oklahoma Supreme Court |
¶0 Oil and Gas--Public Lands--Contract Between Joint Locators of Placer Mining Claim on Public Lands Whose Rights Eventuated in Royalty Interest in Productive Oil Lease Held Enforceable.
A. made a selection of public lands of the United States for the purpose of making a location thereon for himself and wife under the federal placer mining law, and joined with others in a joint mining claim. He was advised that his wife was ineligible as a locator, whereupon V. orally agreed with A. to take over and to perfect the location selected for A.'s wife, and thereby became one of the joint locators in consideration of V.'s paying to A.'s wife one-half of V.'s certain profits derived from such location. In subsequent litigation it was judicially determined that the lands involved were not subject to placer mining entry, and that the locators acquired no rights in the property. By chapter 249, 42 Stat. 1448, the locators or their successors in interest were recognized as having an equitable interest in the lands attempted to be located on, and the Secretary of the Interior was authorized to grant permits or leases on such lands in the adjudication of claims thereto, The joint locators consolidated with two other joint placer mining claims and assigned their interests to B., reserving to the consolidated locators a one-sixth royalty interest in and to the rents and profits and the oil, gas, and minerals derived and produced from a lease upon the lands involved. B. was awarded and granted an oil and gas lease upon approximately one-half of the area involved in the consolidated joint claim, subject to contracts not contrary to law or public policy. Successful development of the leasehold for oil and gas followed. V. repudiated the agreement made with A. A.'s wife sued V. to enforce the agreement, appropriately pleading the above facts. The trial court sustained defendant's objections to the introduction of evidence, based on grounds below adjudicated. Plaintiff elected to stand on her petition. Judgment against her was rendered. It is held:
First. The agreement between A. and V. for the benefit of A.'s wife created a trust in personal property, and is enforceable in equity, and it does not come within the statute of frauds.
Second. Favorable adjudication of defendant's claim by the granting of a lease to B. under chapter 249, 42 Stat. 1448, did not affect the jurisdiction of the proper court of the state to hear and determine plaintiff's claim.
Third. The agreement between A. and V. is not contrary to law or public policy within the meaning of section 2, chapter 249, 42 Stat. 1448.
Fourth. Plaintiff's petition stated a cause of action against defendant, and it was error to sustain defendant's objections to the introduction of evidence interposed thereagainst and render judgment against plaintiff.
Commissioners' Opinion, Division No. 1.
Error from District Court, Tillman County; Frank Mathews, Judge.
Action by Mary Atchley against Fred Varner to enforce a trust in personal property. Objection by defendant to the introduction of evidence was sustained, and plaintiff electing to stand on her petition, judgment was rendered for defendant, and plaintiff appeals. Judgment reversed, and the cause remanded, with directions.
J. H. Foster, Womack, Brown & Cund, and Mounts & Chamberlin, for plaintiff in error.
Dale, Brown & Hoyland and Wilson & Roe, for defendant in error.
¶1 On April 20, 1926, appellant, Mary Atchley, referred to as plaintiff, sued appellee, Fred Varner, referred to as defendant, and Burk Divide Oil Company, Consolidated, and the Belle Oil Company, as codefendants, but not parties on appeal, to establish a trust in personal property operative upon the accrual of profits to defendant derived from the sale of oil and gas produced from certain real property leased for oil and gas purposes. By objection to the introduction of evidence in the cause, defendant admitted the allegations of fact upon which the suit was predicated. The court sustained the objection. Upon plaintiff's election to stand on her petition, judgment that she take nothing by her suit was rendered. The general question here therefore is: Does plaintiff's petition state a cause of action against defendant?
¶2 In substance, plaintiff alleged that she is the equitable owner of an undivided 1/288th interest in and to all of the oil, gas and minerals which have been and may be produced from a certain oil and gas mining lease by the lessee, Burk Divide Oil Company, Consolidated, or its successors in interest, of which moiety claimed by plaintiff defendant appears as the record owner; that her said interest arose and exists by virtue of an oral agreement entered into by and between plaintiff's husband and defendant on or about January 21, 1919, based on a state of facts, to wit:
¶3 Plaintiff's husband selected for the purpose of locating a placer mining claim a certain 40-acre tract of the public lands of the United States, the same being in the bed of Red river, of which tract 20 acres was for himself and the other 20 acres for his wife, this plaintiff, and in which selection he joined with certain other locators to constitute a joint mining claim known as the Mary Isle Placer Mining Claim consisting of 160 acres, wherein each locator would have an undivided interest equivalent to the moiety that the legal individual location of 20 acres bore to the joint claim of 160 acres; that upon being informed that his wife was ineligible as a locator, he transferred her right and claim of selection of location to said 20 acres and her right of membership in the joint mining venture to defendant, in consideration whereof defendant agreed to perfect said location as a part and parcel of the joint mining claim, and that in the event such joint claim proved to be profitable defendant would pay or direct to be paid to plaintiff the one-half of the revenues and profits and the one-half of the proceeds of the sale of oil, gas or other minerals derived or produced therefrom to which defendant's interest in said joint mining claim acquired therein pursuant to the said oral agreement should be entitled.
¶4 Subsequent to said oral agreement, defendant and his co-locators constituting the said Mary Isle Placer mining claim, consolidated their said joint claim with two other like claims adjacent thereto and located by various other parties, such other joint claims being known as the Judsonia and Belle Isle Placer mining claims, the whole of said consolidated claim comprising 480 acres, and it being agreed in said consolidation that each locator would have such interest in the whole of the consolidated properties as his interest in his individual location bore to the consolidated claim; that after said consolidation, the consolidated joint locators assigned their claims to the Burk Divide Oil Company, Consolidated, reserving to the consolidated locators a 25 per cent. royalty of all oil, gas and other minerals that may be produced from said consolidated claim; that thereafter in litigation involving the rights of the consolidated joint locators to locate placer mining claims on said lands, it was judicially determined that said lands were not subject to placer mining entry and that defendant and his said consolidated colocators acquired no rights in and to the locations thus made, such judicial determination having been made by the Supreme Court of the United States in the cause entitled Oklahoma v. Texas, 258 U.S. 574, 66 L. Ed. 771, 42 S. Ct. 406, decided May 1, 1922; that subsequent to said litigation the parties to the consolidated joint mining venture modified their agreement in that if the said Burk Divide Oil Company, Consolidated, should be able to secure from the United States a lease or leases covering the lands comprised in the consolidated joint mining claim at its expense and without further cost to said joint locators, the royalty reserved to said joint locators would be in the proportion of one-sixth of all rents and profits and of the oil and gas that may be derived and produced from said leasehold so obtained from the federal government; that said Burke Divide Oil Company, Consolidated, prosecuted its claim for such leases and obtained from the federal government a lease covering 237 acres of lands originally included within the consolidated claim, from which leasehold said lessee has reduced to possession a great quantity of oil; that subsequent to the consolidated joint mining venture agreement, her said husband died, and that she thereafter was informed that he had been erroneously advised as to her eligibility to file and perfect a placer mining claim upon the public lands of the United States, and that in her efforts to collect and bring under her control all her property she sought from said defendant her share of the proceeds of oil produced from said leasehold, defendant's interest therein under the consolidated joint venture then being equivalent to a 1/144th interest of which her share was one-half or the equivalent of a 1/288th interest; that thereupon defendant repudiated said agreement entered into with her husband, whereunder her said claim of interest arose, and refused to pay or cause to be paid over to her such share of the proceeds of the oil produced from said leasehold to which she was thus entitled, and thereupon prayed judgment for her said interest in the monies held by said defendants and which may thereafter accrue, and that her rights in and under the said oral agreement be adjudicated, and that she be adjudged and decreed to be the owner of one-half of the oil and gas produced from said leasehold accruing to defendant.
¶5 Defendant's pleading, sustained by the court, styled "Objection to the Introduction of Evidence and Demurrer to Petition," was as follows:
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Testerman v. Burt
...some person or organization qualified to receive the lease and carry out its requirements." ¶38 In the recent case of Atchley v. Varner, 138 Okla. 156, 280 P. 616, the plaintiff in error there, who was the defendant below, made the contention that the trial court was without jurisdiction to......
- Atchley v. Varner