Magnolia Petroleum Co. v. Moyle

• Decision Date: 07 December 1946
• Docket Number: 36458.
• Citation: 162 Kan. 133,175 P.2d 133
• Parties: MAGNOLIA PETROLEUM CO. v. MOYLE.
• Court: Kansas Supreme Court

175 P.2d 133

162 Kan. 133

MAGNOLIA PETROLEUM CO. v. MOYLE.

No. 36458.

Supreme Court of Kansas

December 7, 1946

Rehearing Denied Jan. 11, 1947.

Appeal from District Court, Stevens County; F. O. Rindom, Judge.

On rehearing.

Former opinion adhered to in part.

For former opinion, see 160 Kan. 722, 165 P.2d 419.

HARVEY C. J., and THIELE, PARKER, and BURCH, JJ., dissenting in part.

Syllabus by the Court.

1. The general rule is that a judgment may not be attacked in a collateral proceeding except on jurisdictional grounds.

2. Where the record discloses that the affidavit for service of summons by publication alleged that it was not known whether a corporation was legally existing or dissolved and that plaintiff, with due diligence was unable to procure actual service of summons within the state, the corporation may not collaterally attack the service of process by showing that it was a foreign corporation duly authorized to do business within the state and that it had filed an irrevocable consent that service of summons might be served upon it under the provisions of G.S.1935, 17-501.

3. A tax foreclosure action brought under G.S.1941 Supp., 79-2801 is a proceeding in rem, and jurisdiction of the res is essential to the validity of any judgment in such an action.

4. Conditions precedent to the maintenance of a tax foreclosure action are that taxes lawfully assessed against real estate shall have been unpaid and the real estate involved must have been sold and bid in by the county at a delinquent tax sale and unless those conditions exist, the district court has no jurisdiction of the real estate and any judgment ordering its sale is void.

5. Where an interest in any minerals in any real estate is conveyed as provided in G.S.1935, 79-420, and the deed is duly recorded or the interest listed for taxation as therein required, and thereafter the mineral interest is separately taxed and the taxes are fully paid, the mineral interest is not subject to sale in any tax foreclosure action; but where, in the deed of conveyance of the mineral interest, there is also conveyance to the grantee of rights and easements in the fee to the surface of the real estate, and the tax on the surface is not paid, such rights and easements are subject to sale in a tax foreclosure action as a part of the fee in the surface.

Roy C. Davis, Warren H. White, Frank S. Hodge, Wm. H. Vernon and Eugene A. White, all of Hutchinson, for appellant.

R. C. Russell, of Great Bend, and Jos. G. Carey, W. F. Lilleston, George C. Spradling, Henry V. Gott and Ralph M. Hope, all of Wichita, for appellee.

THIELE Justice.

After the original submission of this cause an opinion was filed January 26, 1946, which appears in 160 Kan. 722, 165 P.2d 419. A rehearing was granted, the appeal has been re-argued and upon consideration the court has concluded that a correct decision was not made in its first opinion. To avoid references to the first opinion for a statement of the facts, the case will be restated.

The action out of which the appeal arose was one to quiet title to real estate, under circumstances more fully set out later. The trial court rendered judgment in favor of the plaintiff and the defendant appeals. The parties will be referred to hereafter as Magnolia and Moyle.

In its petition filed in March, 1944, Magnolia alleged it was a corporation under the laws of Texas and qualified to transact business in Kansas; that it was the owner in fee simple of an undivided one-half interest in and to all of the oil, gas and other minerals in and under and that may be produced from the Northwest Quarter of Section 23, Township 31, Range 38, West, in Stevens County, Kansas, and that Moyle claimed an adverse interest, but that Magnolia claimed he had no interest and should have its title quieted against him, and it prayed for judgment accordingly.

Moyle filed his answer and cross-petition. Insofar as it is necessary to notice, the answer contained a qualified general denial and an allegation that Moyle was the owner and in possession of the above described real estate under a sheriff's deed recorded October 15, 1942, and under the proceedings leading up to its execution and delivery, in the action of Board of County Commissioners of Stevens County v. Andrews et al., and hereafter referred to as the tax foreclosure action, and that Magnolia's rights were adjudicated in that action and such adjudication had become final. Under his cross-petition Moyle sought to quiet his title against the Magnolia.

In its reply the Magnolia pleaded that it had acquired title to the mineral rights by a deed from J. C. Gerrond, dated November 2, 1927, and recorded January 2, 1928, in Book F. Misc. at page 370, and that since the filing of the deed Stevens County duly assessed and levied taxes on its mineral interest and it had paid the taxes, and that since October 31, 1927, it had been in peaceable possession. A copy of the deed was attached as an exhibit and is referred to later. It admitted the proceedings under which the sheriff's deed to Moyle was issued but denied that the deed affected its title. It also pleaded that it was duly authorized to do business in Kansas on October 31, 1927, and at all times since and had appointed a registered agent on whom process might be served; that no process had been served upon it in the tax foreclosure suit; that no process or service of summons had been made upon it except by publication although actual service of summons could at all times have been obtained upon it and that it had no knowledge of the tax foreclosure proceedings or the issuance of the sheriff's deed until during the month of October 1943. Magnolia's answer to Moyle's cross-petition need not be notice.

The deed from J. C. Gerrond to Magnolia conveyed:

' An undivided one-half interest in all minerals, including oil, gas, coal, and all other minerals, whether solid, fluid, or volatile, lying on or under or that may be produced or reduced to its possession and saved upon the following described real estate situated in the county of Stevens in the state of Kansas, to-wit:

'The North One-half of Section 23, Township 31 South, Range 38 West.

'Together with the perpetual and irrevocable right, privilege and easement of ingress and egress in, upon, and from said lands at all times for the purpose of mining, drilling and exploring said land for oil, gas and all other minerals and removing the same therefrom together with the use of such amount of the surface of said land as is necessary or useful to produce, save, store, refine, mill and remove said minerals, including salt water, or any of them if found, and to extract or manufacture any produce therefrom and to conduct all operations and erect or use thereon all such buildings, derricks, tanks, structures, machinery, and equipment as may be necessary or proper for any or all such purposes, and to have the right of way on said land for, and the right to lay and operate thereon pipelines, erect and operate telephone and telegraph lines for the use of grantee in the business conducted thereon, to repair and remove from said lands any of grantee's properties thereon, including the right to draw and remove casing therefrom, and to have and to use, free of charge, water from said land, except water from grantor's well, for operations thereon, and to have and enjoy all other rights, easements and privileges necessary, incident to, or convenient for the economical operation of said land for the production of said mineral or minerals, or as are reasonably required for conducting and carrying on all things herein granted, provided, however, that grantor upon payment to grantee of one-half of all expenses and costs of producing such minerals, shall thereupon be entitled to one-half (1/2) of the net profits arising from the sale and disposition of said minerals in their natural state and as produced from and sold on said realty.'

It was further provided in the deed that: 'It is hereby expressly declared that it is intended by this instrument to convey the fee simple title to an undivided one-half of all the minerals and mineral rights, including oil, gas, and all other minerals, whether solid, fluid, or volatile in, within, upon, or underlying or that may be produced from the above described lands, and all the grantor's rights to operate for said minerals, and deal or contract with regard thereto, including the leasing thereof as fully to all intents and purposes as if the said grantee were the absolute owner of the entire title and estate in said lands and without any obligation whatsoever on the part of the grantee, either express or implied at any time to drill, mine, develop or otherwise explore for any oil, gas, or other minerals in or upon said lands, but in the event grantee, its successors or assigns, develops said minerals and produces oil, gas or other minerals from said described lands, then grantor shall have the right to repay grantee their proportionate share of all expenses for developing and saving said minerals and receive their proportionate share of the net profits arising from the sale of said minerals in their natural state as produced from and sold on said realty. In the event grantee executes a mineral lease upon said premises, which it is hereunto duly authorized to so do, grantor shall be entitled to a one-half undivided interest in all of the royalties, rentals and bonuses provided for in such lease.'

The parties entered into a stipulation of facts covering the status of the parties, the execution and filing of the mineral deed; that the mineral interest of Magnolia was assessed for taxation and that it had paid the taxes thereon that Moyle was the grantee named in a sheriff's deed, a...