Devil's Den Consol. Oil Co. v. United States

• Decision Date: 01 July 1918
• Docket Number: 3094-3096.
• Citation: Devil's Den Consol. Oil Co. v. United States, 251 F. 548 (9th Cir. 1918)
• Parties: DEVIL'S DEN CONSOL. OIL CO. v. UNITED STATES. LOST HILLS MINING CO. et al. v. SAME.
• Court: U.S. Court of Appeals — Ninth Circuit

251 F. 548

DEVIL'S DEN CONSOL. OIL CO. v. UNITED STATES.

LOST HILLS MINING CO. et al. v. SAME.

Nos. 3094-3096.

United States Court of Appeals, Ninth Circuit.

July 1, 1918

These cases were heard together in the court below and have been argued and submitted together here. They are, in the main alike, the real issues being substantially the same; but there are some differences, which will be pointed out. They are cases of great importance, not only by reason of the questions involved, but also because the lands in controversy are oil-producing in large quantities, and hence of great value. That the lands are mineral in character is shown, and it is conceded that the legal title thereto is in the United States, and that the defendants to the respective suits were at the time of their commencement in possession of the lands respectively involved in them, and were at the time extracting oil therefrom. In such circumstances the government instituted the suits, and, among other things prayed for the appointment of a receiver in each of them which applications the court below granted, and from which orders the present appeals were taken. The evidence upon which the orders were based has by stipulation of the parties been printed only in the record of case No. 3095. We therefore make reference to that record, as have the respective counsel in their arguments and briefs, noting only the differences that have been referred to.

In its bill in case here numbered 3095 the government alleged that on and before September 27, 1909, the lands involved, to wit the northwest quarter and the southeast quarter of section 30, and all of section 32, of township 26 south, range 21 east, Mt. Diablo meridian, were parts of the public domain, of which the United States has ever since been the owner and entitled to the possession, including all oil, petroleum, gas, and other minerals therein contained; that on the said 27th day of September, 1909, the President, under the authority legally vested in him, withdrew and reserved the said described tracts, together with other lands, from mineral exploration and from all forms of location, occupation, entry, or disposal under any law of the United States; that nevertheless, and in violation of law and of such action of the President, the defendants Lost Hills Mining Company and Universal Oil Company entered upon and took possession of the said specifically described tracts, 'long subsequent to the 27th day of September, 1909, but not prior thereto, for the purpose of prospecting and exploring for petroleum and gas therein, and did so prospect and explore long subsequent to the date on which said lands were withdrawn, as hereinbefore mentioned, by said withdrawal order of September 27, 1909.'

The bill also alleges that none of the defendants had discovered petroleum, gas, or other minerals in the lands before their withdrawal, and that neither of them, nor any one under whom they claim, was at the date of such withdrawal a bona fide occupant or claimant of any of the land, or in the diligent prosecution of work leading to the discovery of oil or gas therein, and that neither of them, after the dates of their respective alleged entry thereon, 'and after beginning the prosecution of the work of drilling for oil and gas, in violation of the order of withdrawal of September 27, 1909, continued in the diligent prosecution of such work till oil or gas was discovered'; that long after the withdrawal of the lands as alleged, 'to wit, on the 29th day of July, 1910, and not before that date, as plaintiff is informed and believes,' the defendant Lost Hills Mining Company discovered petroleum therein, and since that date it and the defendant Universal Oil Company have drilled numerous wells thereon, and have, in violation of the rights of the complainant, and to its great and irreparable damage, and to the great and irreparable injury to the said described lands and other lands of the government, extracted therefrom large quantities of petroleum and gas, the exact amount and value of which the complainant is unable to state, all of which the defendants have sold and converted to their own use; that the said named defendants are continuing to unlawfully extract such oil and gas, to the irreparable injury of the lands, and that each of them 'claims some right, title, or interest to said land, or some part thereof, or in the petroleum or gas extracted therefrom, or in or to the proceeds arising from the sale of such petroleum, or through and by purchase thereof, and each of said claims is predicated upon, or derived directly or mediately from, some pretended notice or notices of mining locations, or otherwise, and by conveyances, contracts, or liens directly or mediately from the persons by whom such pretended locations are claimed to have been made. But none of such location notices and claims is valid against this plaintiff, and no rights have accrued to the defendants or any of them thereunder, either directly or mediately, nor have any minerals been discovered on said land, except as hereinbefore stated; but said claims are asserted to cast a cloud upon the title of the plaintiff herein, and wrongfully interfere with its operation and disposition of said land, to the great and irreparable damage of said plaintiff, and to the great and irreparable injury of said land, and the plaintiff herein is without redress or adequate remedy save by this suit, and this suit is necessary to avoid a multiplicity of actions.'

The next allegation of the bill is as follows: 'Except as in this bill stated, the plaintiff has no other knowledge or information concerning the nature of any other claims asserted by the defendants herein, or any of them, and therefore leaves said defendants to set forth their respective claims and interests. In that behalf plaintiff alleges, because of the premises of this bill, that none of the defendants has or ever had any right, title, or interest in or to, or any lien upon, said land or any part thereof, or any right, title, or interest in or to the petroleum, mineral oil, or gas deposited therein, or any right to extract petroleum, gas, or other minerals from said land, or to convert or dispose of the petroleum or gas so extracted, or any part thereof; on the contrary, the acts of these defendants who have entered upon said lands and drilled oil and gas wells thereon, and used and appropriated the petroleum deposited therein, and assumed to sell and convey any interest in or to any part of said lands, or any part of the petroleum extracted therefrom, were all in violation of the laws of the United States and of the aforesaid order of withdrawal, and all of said acts are in violation of the rights of the plaintiff herein, and such acts interfere with the execution by the plaintiff of its public policies with respect to said lands and the petroleum and gas therein as hereinbefore set forth.'

After alleging the value of the lands involved in the suit to exceed $1,000,000, the prayer is in substance that the defendants and each of them be required to disclose and state their respective claims; that they and each of them be adjudged to have no estate, right, title, or interest in any of the lands involved, or in the contents thereof, and that all of the said property be decreed to be the property of the complainant, free and clear of any claim on the part of either of the defendants; and that all of them be enjoined from asserting any right, title, interest, claim, or lien on any of the said property, and that each of them, and all of their officers, agents, servants, and attorneys, during the progress of the suit, and thereafter, finally be enjoined from going upon any portion of the said land in controversy, and from in any manner using or extracting therefrom any of its contents, and from in any manner committing any trespass or waste thereon, and for an accounting and for the appointment of a receiver to take possession of all of said specifically described land, and of all wells and other property thereon, 'with full power and authority to continue the operations on said land in the production and sale of petroleum and other minerals, where such course is necessary to protect the property of the complainant against injury and waste, and for the preservation, protection, and use of the oil and gas in said land, and the wells, derricks, pumps, tanks, storage vats, pipes, pipe lines, houses, shops, tools, machinery, and appliances being used by the defendants, their officers, agents, or assigns, in the production, transportation, manufacture, or sale of petroleum or other minerals from said land or any part thereof, and that such receiver may have the usual and general powers vested in receivers or courts of chancery.'

Subsequently the bill was so amended as to describe the lands involved as the northwest quarter and the southeast quarter of section 30, and the northeast quarter and west half of section 32, all in township 26 south, of range 21 east, Mt. Diablo meridian.

The answer of the defendants, after specifically denying various allegations of the bill, set up as a further and separate defense that on the 13th day of February, 1907, eight specifically named individuals, all of whom it alleged were then citizens of the United States, entered upon and took possession of the northwest quarter of the said section 30 and duly located the same under the laws of the United States relating to placer mining claims, a notice of which location was thereafter duly filed in the office of the recorder of the county in which the land is situated, since which time the said piece of land has been in the actual, peaceable, open, notorious, continuous, exclusive and undisputed possession of the defendant ...