Buffalo Basin Petroleum Co. v. Tanberg Oil Co.

• Decision Date: 21 July 1932
• Docket Number: 1703
• Citation: 13 P.2d 243,44 Wyo. 424
• Parties: BUFFALO BASIN PETROLEUM CO. v. TANBERG OIL CO
• Court: Wyoming Supreme Court

13 P.2d 243

44 Wyo. 424

BUFFALO BASIN PETROLEUM CO. v. TANBERG OIL CO

No. 1703

Supreme Court of Wyoming

July 21, 1932

APPEAL from District Court, Hot Springs County; E. H. FOURT, Judge.

Action by the Buffalo Basin Petroleum Company, a corporation, which filed a counterclaim. From a judgment for plaintiff on the pleadings, defendant appeals.

Affirmed.

The cause was submitted for the appellant on the brief of W. L Walls, of Cheyenne, Wyoming, B. C. Hilliard, Jr., and Horace N. Hawkins, of Denver, Colorado.

On motion for judgment on pleadings, defendant's answer and counterclaim must be considered as true. If taken as true in the present case it presents a case of unclean hands on the part of plaintiff. Pomeroy Vol. 1, Secs. 397, 400 (4th Ed.); White v. Baugher, (Colo.) 256 P. 1092; Primeau v. Granfield, 193 F. 911; Avelin v. Ridenbaugh, 9 P.2d 168; Witlin v. Jones, 234 P. 515, 517; Wilson v. Portland, 169 P. 90. The trial court erred in considering allegations of plaintiff's reputation in passing upon the motion for judgment on pleadings. Defendant's pleading states a valid defense to plaintiff's petition and sets forth a valid cause of action in this case. Herbert v. Bond, (S. D.) 228 N.W. 185. The "pet" case relied upon by counsel for plaintiff, Hodgson v. F. Oil & Development Co. , 5 F.2d 442, 71 L.Ed. 901, differs materially on the facts from the case at bar. Plaintiff's motion for judgment should not be allowed to usurp the functions of a demurrer. We assume that this court is familiar with the practice which precludes motions for judgment when a demurrer would suffice and motions of the kind are discouraged.

For the respondent there was a brief by J. B. Barnes and A. C Campbell, of Cheyenne, Wyoming, and A. K. Barnes, of Casper, Wyoming, and an oral argument by Mr. Campbell.

Plaintiff's motion for judgment on pleadings was properly sustained. Iba v. Assn., (Wyo.) 40 P. 527; Rice v. Bush, (Colo.) 27 P. 720; Horsky v. Moran, (Mont.) 34 P. 360; Widmer v. Martin, (Calif.) 25 P. 264. All allegations in defendant's answer and counterclaim are not taken as absolutely true upon the motion by plaintiff for judgment on the pleadings. Abbott's Civ. Jury Trials, (2d. Ed.) p. 118; Grover v. Lovell, (Wyo.) 131 P. 43; State v. Irvine, (Wyo.) 84 P. 90; Edwards v. Cheyenne, (Wyo.) 114 P. 677. A judgment on the pleadings should be sustained unless the pleadings are insufficient to sustain a defense judgment, notwithstanding any evidence that might be produced. Defendant's answer and counterclaim does not set up a good defense nor a good counterclaim; nor is it shown that appellee holds any part or interest in the lease in trust for appellant. The case of Herbert v. Bond, (S. D.) 228 N.W. 185, cited by appellant does not sustain their position; the supreme court cases are to the contrary. Anicker v. Gunsburg, 246 U.S. 110, 62 L.Ed. 603; Hodgson v. Co., 274 U.S. 15, 71 L.Ed. 901. Counsel for appellant contend that the decision of the lower court should be reversed because appellee is not in court with clean hands; they are content to submit the record on this point. An oil and gas lease issued by the United States may be used as a means of quieting its possessors in the enjoyment of the land included therein. St. Louis Smelting etc. Co. v. Kemp, 14 Otto 637, 26 L.Ed. 875. A grant of a vested interest was right of possession. Smith v. McCullough, 285 F. 698; Ewart v. Robinson, 289 F. 740; Logan Co., 126 F. 623; Elk Fork Co., 84 F. 839. Courts will take judicial notice of the Leasing Act and the rules made thereunder. U. S. v. Gum, 58 P. 398; Caha v. U.S. 152 U.S. 211; U. S. v. Co., 165 F. 936; Nagle v. U.S. 145 F. 302; Henderson v. Midwest Co., 43 F.2d 23, 26. The lease was earned and was issued because the permittees had complied with the conditions of the permit. Parker v. Sinclair, 25 F.2d 570. Courts will follow decisions of the Land Department on leases. McMichael v. Murphy, 197 U.S. 304, 49 L.Ed. 766; U. S. v. Mills, 190 F. 513. The motion for judgment upon the pleadings is based upon the insufficiency of allegations in appellant's pleadings, to entitle it to any relief; relief has the effect of a judgment in rem and cannot be collaterally attacked. Appellant's counterclaim is a collateral attack upon appellee's interest in the lease. In order to restrain its action to hold appellee as a trustee for appellant a pleading must show that appellant was entitled to the lease. Burke v. Taylor, 45 Land Dec. 585. Also that appellee prevented appellant from obtaining the lease. Bohall v. Dilla, 114 U.S. 48; Lee v. Johnson, 116 U.S. 48; Savage v. Worsham, 66 F. 852; James v. Wilkinson, (Kan.) 42 P. 735; Whitman v. Severance, (Minn.) 49 N.W. 255. It must also show that appellant acquired from appellee an interest in the land or in the lease. Hodgson v. Co., supra. No fiduciary relationship is alleged. People v. Palmer, (N. Y.) 46 N.E. 328. The lease held by appellee is in effect a judgment in rem, and not subject to collateral attack. Chevor v. Horner, (Colo.) 17 P. 495; U. S. v. Winona etc. Co., 67 F. 942; Henderson v. Midwest Ref. Co., supra; French v. Fyan, 93 U.S. 169. The authorities are reviewed by Judge Sanborn in U. S. v. Winona & St. P. R. Co., 67 F. 945. Appellant is estopped to complain of what was done to secure the permit for the lease. U. S. v. Dunn, 268 U.S. 121; Parker v. Sinclair, 25 F.2d 570. Averments that appellant's lessor could have obtained patent are immaterial. Knight v. U. S. Land Assn., 142 U.S. 161; Light v. U.S. 220 U.S. 523. The granting of a patent involved questions of fact which must be considered and decided. Johnson v. Towsley, 13 Wall. 72. And they may be decided where a patent has been applied for. Quinby v. Conlan, 104 U.S. 420.

KIMBALL, Chief Justice. BLUME and RINER, JJ., concur.

OPINION

KIMBALL, Chief Justice.

On June 22, 1927, under Section 14 of the Federal leasing act (41 Stat. 442, 30 USCA, § 223), the United States, as lessor, gave an oil and gas lease of some 2000 acres of land to plaintiff and 21 other lessees. Plaintiff, claiming a seven-sixteenths interest in the lease, brought this action to quiet its title to 800 acres of the leased lands. The defendant by its answer and counterclaim asserted its right to an undivided eleven-twelfths interest in the lease so far as it applies to said 800 acres, and asked a decree establishing a trust in its favor. A motion by plaintiff for judgment on the pleadings was sustained in the trial court and judgment entered in conformity to the prayer of the petition. The defendant appeals.

The petition alleges the issuance of the lease; possession by the lessees; that plaintiff has a seven-sixteenths interest in the lease and the oil and gas in the leased lands, and that defendant without right asserts and threatens to enforce a claim to an undivided eleven-twelfths interest in the lease as it affects 800 described acres. The prayer is for a decree quieting plaintiff's right and title against defendant's claim.

The answer admits the issuance of the lease, denies that the lessees are in possession of the lands in question, and alleges that any right or interest of plaintiff in the 800 described acres is held in trust for defendant as set forth in a counterclaim.

The counterclaim states in some detail the facts upon which defendant relies as showing a trust. We assume that the allegations of this pleading were sufficient to have permitted the defendant to prove the facts substantially as set forth in the following statement:

In March, 1924, eight persons located the 800 acres as 5 placer mining claims of 160 acres each. We shall sometimes call these persons "locators," and their claims "locations," though there was no allegation of a discovery of mineral when the claims were initiated. The locators took possession of the lands which they were entitled to occupy for the purpose of prospecting for oil and gas. In May, 1914, they leased the lands by written lease that gave the lessee and assigns the exclusive right to drill for and extract oil and gas, reserving to the locators a royalty. The defendant has succeeded to the rights of this lessee by assignment ratified by the locators. The pleading does not state what the lessee by the terms of the lease was required to do to protect the locations, but it is alleged that defendant has at all times complied with the terms of the lease and by itself and others expended many thousands of dollars in drilling operations on and for the benefit of the lands and in complying with the laws relating to the holding of placer mining claims. Another lease to defendant is mentioned, but we do not understand that defendant claims under this lease any right it did not have under the assigned lease. The leases provided that the locators "would protect and procure title to said lands."

February 25, 1920, the Federal leasing act was approved. A preferential right to a permit is given to "any person who on October 1, 1919, was a bona fide occupant or claimant of oil or gas lands under a claim initiated while such lands were not withdrawn from oil or gas location and entry, and who had previously performed all acts under existing laws necessary to valid locations thereof except to make discovery and upon which discovery had not been made prior to the passage of this act, and who has performed work or expended on or for the benefit of such locations an amount equal in the aggregate to $ 250 for each location if application therefor shall be made within six months from the passage of this act." Sec. 19, 41 Stat. 445, 30 USCA Sec. 228. Upon compliance with the permit the permittee is entitled to a lease under Section 14, cited above. It is alleged that, on the approval of the leasing act, the locators were entitled to a...