Carter Oil Co. v. McQuigg
| Citation | 112 F.2d 275 |
| Decision Date | 21 June 1940 |
| Docket Number | No. 7071,7073,No. 7150.,7071,7150. |
| Parties | CARTER OIL CO. v. McQUIGG et al. (two cases). |
| Court | United States Courts of Appeals. United States Court of Appeals (7th Circuit) |
William M. Acton, of Danville, Ill., and Walter Davison, Craig Van Meter, and Fred H. Kelly, all of Mattoon, Ill. (L. G. Owen, of Tulsa, Okl., of counsel), for Carter Oil Co.
John J. Baker and J. C. Willard, both of Shelbyville, Ill., and Clayton J. Barber, of Springfield, Ill. for McQuigg et al.
Before EVANS, SPARKS, and TREANOR, Circuit Judges.
We are here presented with three appeals. Two are cross-appeals from one decree, entered in a suit which involved opposing litigants' contested, but asserted, right to drill and take oil from land in Fayette County, Illinois. Plaintiff and defendants each claim to hold valid oil leases to this land.
The third appeal is from an order entered in the same case — a few months later, to-wit, November 8, 1939, appointing a receiver "to manage" the production and disposition of the oil taken from this land and enjoining the defendants from proceeding further with a suit in the Illinois State Court, brought under Chap. 104, Pars. 25-33, of the Illinois Statutes of 1939.
The District Court referred the issues in the primary cause to a master who made findings and conclusions. A motion to confirm resulted in the court's adopting some, and rejecting others of the master's findings. Its decree was partly favorable and partly adverse to the relief sought by both parties. Both sides were aggrieved and appealed. (Appeals Nos. 7071 and 7073.)
Subsequent to the entry of this decree, the defendants instituted suit in the state court seeking relief under Chap. 104, Pars. 25-33, Illinois Statutes, 1939. Plaintiff then petitioned the District Court to enjoin the defendants from proceeding further in the state court, and this requested relief was granted. Defendants' appeal (7150) is from this order.
A full statement of the facts and a discussion of the issues by Judge Lindley appear in D.C., 27 F.Supp. 182.
This litigation is traceable to the discovery of oil in an area which included an eighty acre tract of land in Fayette County, Illinois, the title to which in 1919 was in Leander J. Wood and his wife, Emily. The discovery of oil in this vicinity gave to the land a value undreamed of and was provocative of an assiduous, aggressive litigation.
The basis of the controversy is the reservation in a quitclaim deed from the fee owners, Leander J. Wood and wife, Emily, to their five children, Lemuel, Charles, John Arthur, Dorothy W. Miller, and Alice W. Gregg (who subsequently died leaving a husband, George, and three children, Kermit, Emily (minor), and Kenneth). This quitclaim deed bore date of January 30, 1919. It contained the following litigation-breeding provision: "Provided, this deed is not to take effect during the lifetime of either of the grantors."
In view of this provision, the question was and is — Who can grant a valid oil mining lease to this land?
The oil companies and oil land speculators have come to grips over it. What was the estate which the father and mother reserved — a life estate? Nothing more? If so, were the life tenants or the remaindermen entitled to the oil? The lure of rich royalties was too strong for the family ties. The speculator, in search of options and leases, was callous to the bonds of family sentiment. The execution of a lease by the parents to a competitor was no deterrent to him. The children yielded to the promise of riches. The litigation was on. The issues of fact are as numerous as the questions of law. Contradictions and disputes in testimony are sharp and in some instances, hard to reconcile with the witnesses' honesty of belief.
The plaintiff, The Carter Oil Company, derived its asserted rights through an oil lease from Leander J. Wood and wife, who may be called the life tenants. This lease bore date of June 9, 1936.
Plaintiff also claims rights in and to two-fifths of the remainder estate (a) through a lease from the son, Arthur, bearing date March 31, 1937, and (b) through a deed from the grantee of one of the children, a son Lemuel Wood.
The validity of the lease from Arthur is assailed because of alleged material alterations in it and additions to it. The conveyance from Lemuel is attacked on the ground that the grantee of Lemuel was merely a mortgagee without power to convey.
As to (b) plaintiff contends it is an innocent purchaser who acted in the good faith belief that its lessor had acquired Lemuel's interest by a valid absolute deed of conveyance.
Although the various lessees and remaindermen are made defendants in the suit, the real adversary party is one termed an oil land prospector, Harry M. McQuigg, who sought and secured leases from some of the children and a quitclaim deed from the life tenants. His deed from the life tenants was executed, however, after they had executed their leases to the plaintiff. He also obtained oil leases from some of the remaindermen, — to-wit, a lease from Arthur subsequent to the one executed to the plaintiff. His lease from Lemuel Wood, to whom Hogge had reconveyed the remainder interest theretofore conveyed to him in the "mortgage" transaction, was subsequent to the execution of a lease by Hogge to the plaintiff. McQuigg obtained a lease from Dorothy Miller, one of the children, January 31, 1938; from Arthur, January 12, 1938 (after the execution by Arthur of a lease to plaintiff, March 31, 1937); and from the three children of the deceased daughter Alice.
Describing the situation generally, — plaintiff had a lease from the life tenants and claimed to have valid leases from owners of two-fifths of the remainder estate. Its rights under the two leases were disputed.
Defendant McQuigg claimed (a) through leases from holders of three of the remaindermen, — a three-fifths interest in said remainder estate. (b) Also he claimed an interest in the remaining two-fifths of the remainder estate through leases obtained subsequent to the leases which had been executed to plaintiff. (c) Also he claimed through a quitclaim deed from the life tenants which however was subsequent to their lease to plaintiff.
PLAT SHOWING DISPOSITION OF 80 ACRES HELD IN FEE BY
LEANDER AND EMILY WOOD
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| |
| LIFE ESTATE RESERVED IN L. J. AND EMILY WOOD |
| IN DEED TO THEIR FIVE CHILDREN |
| |
| ? ? |
| LEASE TO PLAINTIFF ? VS. ? DEED TO DEFENDANT |
| (6-19-36) (5-6-38) |
| |
|--------------------------------------------------------------------------------|
| |
| REMAINDER ESTATE IN CHILDREN CREATED BY 1919 DEED (EACH 1/5 INTEREST) |
| |
| CHARLES | LEMUEL | D. MILLER | JOHN | ALICE GREGG |
| (1/5) | (1/5) | (1/5) | (1/5) | (1/5) |
| ? | ? | ? | ? | ? |
| LEASE TO | DEED TO | LEASE TO | LEASE TO | LEASE BY |
| MCQUIGG | HOGGE | BEAUMONT | CARTER | HEIRS |
| (NOT IN | (11-9-33) | OF 1/16 | (3-1-37) | AND |
| ISSUE) | LEASE | OF HER | AND | HUSBAND |
| | (HOGGE) | INTEREST | ? | TO |
| | TO | (8-14-37) | LEASE TO | MC QUIGG |
| | CARTER | AND | MC QUIGG | |
| | (3-31-37) | ? | (1-12-38) | |
| | AND | LEASE TO | | |
| | DEED TO | MC QUIGG | | |
| | LEMUEL | OF 3/16 | | |
| | (1-14-38) | OF HER | | |
| | ? | INTEREST | | |
| | LEASE | (1-31-38) | | |
| | (LEMUEL) | | | |
| | TO | | | |
| | MC QUIGG | | | |
| | (1-15-38) | | | |
| | | | | |
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The questions and issues which we must determine are:
(1) The extent and character of the estate of Leander J. Wood and Emily Wood — the so-called life tenants.
(2) The fact dispute over the subsequent alleged additions of words to the Arthur Wood lease.
(3) The weight to be given to the District Court's and the special master's findings of fact when in conflict.
(4) The existence and effect of the asserted innocent purchaser status of plaintiff in acquiring the lease from Hogge, the grantee of the son, Lemuel.
(5) Where the life tenant and...
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