Miller v. Belvy Oil Co.

• Decision Date: 12 November 1917
• Docket Number: 4895.
• Citation: 248 F. 83
• Parties: MILLER et al. v. BELVY OIL CO.
• Court: U.S. Court of Appeals — Eighth Circuit

248 F. 83

MILLER et al. v. BELVY OIL CO.

No. 4895.

United States Court of Appeals, Eighth Circuit.

November 12, 1917

Charles West, of Oklahoma City, Okl., for appellants.

John J Shea, of Tulsa, Okl. (Thomas F. Shea, of Deer Lodge, Mont and Burdette Blue, of Bartlesville, Okl., on the brief), for appellee.

Before SANBORN, CARLAND, and STONE, Circuit Judges.

SANBORN Circuit Judge.

This is an appeal from a decree of dismissal of the complaint in a suit in equity upon the ground that the matters which the plaintiffs sought to litigate were res adjudicata by reason of a former suit and decree. On December 9, 1910, James C Cowles, Jr., the lessor, brought a suit in equity against Alva C. Lee, his lessee, in the district court of Washington county, Okl., to cancel and avoid his oil and gas lease, and for such other equitable relief as might be just and proper. Pleadings were made, the Belvy Oil Company, an assignee of the lease, was made a party defendant and answered the complaint, the trial was had and a decree was rendered that the plaintiff take nothing by the action, that the Belvy Oil Company was the full legal and equitable owner of the lease and of all the rights of the lessee thereunder, that the plaintiff James C. Cowles, Jr., and any and all persons acting by, through or under him, were enjoined from interfering with or molesting the Belvy Company in the possession of the leased premises, or in the operation of the lease, and that the plaintiff pay the costs. This decree was rendered on September 5, 1911. During the pendency of that suit in the state court Emil C. Miller and W. H. Byron succeeded to the rights of the lessor, Cowles, Jr., and the Belvy Oil Company succeeded to the rights of the lessee, Lee. After the rendition of the decree Miller and Byron brought suit in the court below against the Belvy Oil Company to cancel and set aside the lease involved in the first suit, to enjoin the Belvy Oil Company from entering upon the leased premises, operating them for oil and gas, or developing the production of oil or gas thereon, and for such other relief as the equity of the case might warrant. As Miller and Byron succeeded to the rights of the lessor, Cowles, Jr., and the Belvy Oil Company succeeded to the rights of the lessee, Lee, pendente lite, their respective rights against each other are the same as they would have been if Miller and Byron had been lessors and the plaintiffs and the Belvy Company had been the lessee and the defendant in the first suit. For the sake of brevity, therefore, this case will be treated as though they had been, and Miller and Byron will be called the plaintiffs and the Belvy Oil Company the defendant.

James C. Cowles, Jr., was a member of the Cherokee Tribe of Indians. He had only a small fraction of Indian blood. On March 6, 1907, when the lease was made, he was a minor, and he became of age on July 1, 1910. The lease was made by James C. Cowles, Jr., and James C. Cowles, as guardian of James C. Cowles, Jr., pursuant to an order of the United States Court for the Northern Judicial District of the Indian Territory, which court had both chancery and probate jurisdiction. It covered the allotment of Cowles, Jr., as a Cherokee Indian and its term was 15 years, thus extending more than 11 years after he became of age.

In the course of the litigation through the two suits the plaintiffs have alleged in all 12 reasons why the lease and the assignment to the Belvy Oil Company should be decreed to be void and be canceled:

(1) That the lessee had failed to pay the royalties reserved in the lease.

(2) That the lessee had failed to explore and develop the leased land for natural gas and oil as he had agreed to do by the terms of the lease.

(3) That the lessee assigned the lease without the consent of the lessor.

(4) That Cowles, Jr., had attained his majority, that he had never ratified the lease, and that it had been and was avoided as to that part of its term which extends beyond his minority.

(5) That the court under whose order the lease was made had no jurisdiction to direct the lease of his land beyond his minority.

(6) That that court had no authority to permit or make the lease, because the proceedings therein for that purpose failed to comply with indispensable statutory requirements relating to such proceedings.

(7) That the lease was assigned without the consent or approval of the lessor or the Secretary of the Interior.

(8) That the lease was not recorded as required by section 20 of the Act of April 26, 1906 (34 Stat. 145, c. 1876).

(9) That the lease of the land of the minor Indian allottee, Cowles, Jr., was forbidden, unless made in the manner expressly authorized by statute; that the proceeding in the United States Court for the Northern District of the Indian Territory, pursuant to which the lease was ordered and made, was a proceeding to give rights of majority to Cowles and to allow him to make the lease; that this was not an authorized method of alienation, and was not a proceeding permissible or in conformity to the applicable statutes in order to permit a guardian to make a lease of the lands of a minor Indian allottee.

(10) That the consent of the Secretary of the Interior to the assignment of the lease to the defendant had never been obtained.

(11) That the assignment of the lease to the defendant was not made in accordance with the rules and regulations of the Secretary and would not have been approved if it had been presented to him before the authority to approve it was abolished by the Act of April 26, 1906.

(12) That after the Secretary's authority to approve the assignment had been abolished the plaintiffs presented to him the facts regarding the same and he declined to act because he had no authority so to do.

The fundamental cause of action in both suits is that the lease and its assignment to the defendant are apparently valid, but were actually void; that they apparently conferred rights on the defendant, but actually conferred no rights; that they, therefore, created a cloud upon the plaintiffs' title, and gave to the defendant an apparent right to possess, develop, and operate the premises for oil and gas, while it had no such right. In their original complaint in their first suit the plaintiffs pleaded the first four grounds or reasons above stated for this cause of action; in a second amended complaint in that suit, which the plaintiffs first tendered after the court had announced its decision of the case, and which the court refused to permit to be filed, but marked tendered and made a part of the record, they pleaded the fifth, sixth, and seventh grounds or reasons above stated; and in the complaint in this, the second suit, they have pleaded the eighth, ninth, tenth, and eleventh grounds or reasons for this cause of action. The question in this case, therefore, is: May the plaintiffs, in view of the decree against them in their first suit to cancel this lease and assignment, remove the cloud they are alleged to cause, and enjoin the defendant from their use, maintain this second suit for substantially the same relief?

The rules of estoppel which must determine the answer to this question are: When the second suit is between the same parties, or their privies, and upon the same cause of action as the first, the judgment or decree in the first is conclusive upon all the parties and their privies in the second suit, not only as to every question and issue which was, but also upon every question and issue, claim, or defense which might have been presented in the first suit. But where the second suit is upon a different cause of action, but between the same parties as the first, or their privies, the judgment or decree in the former operates as an estoppel in the latter as to every point or question which was actually litigated and determined in the first action, but it is not conclusive relative to other matters which might have been, but were not, litigated and decided. Cromwell v. County of Sac, 94 U.S. 351, 24 L.Ed. 195; Union Central Life Ins. Co. v. Drake, 214 F. 536, 542, 131 C.C.A. 82, 88. One may not split his cause of action. An action upon an indivisible cause and an adjudication thereof bars a subsequent action between the same parties and their privies upon the same cause. Brown v. First National Bank, 132 F. 450, 451, 66 C.C.A. 293, 294; Id., 196 U.S. 641, 25 Sup.Ct. 796, 49 L.Ed. 631; Harrison v. Remington Paper Co., 140 F. 385, 397, 72 C.C.A. 405, 417, 3 L.R.A. (N.S.) 954, 5 Ann.Cas. 314; Watkins v. American Nat. Bank, 134 F. 36, 41, 67 C.C.A. 110, 115.

Counsel for the plaintiffs argues that they are not estopped by the decree in the first suit from maintaining the second suit because the two suits are founded on different causes of action. Taking, for illustration of his argument, the ninth alleged ground or reason why the lease is asserted to be void, which was pleaded for the first time in the complaint in the second action, he contends that this constitutes a different and independent cause of action from that set forth in the complaint in the first action, in which were pleaded the first four reasons only, and he cites in support of this view Lim Jew v. United States, 196 F. 736, 116 C.C.A. 364; Water, Light & Gas Co. v. City of Hutchinson, 160 F. 41, 90 C.C.A. 547, 19 L.R.A. (N.S.) 219; Wyman v. Bowman, 127 F. 257, 62 C.C.A. 189; Lublin v. Stewart, Howe & May Co. (C.C.) 75 F. 294; Delaware, L. & W.R. Co. v. Kutter, 147 F. 51, 77 C.C.A. 315; Radford v. Myers, 231 U.S. 725, 34 Sup.Ct. 249, 58 L.Ed. 454; Harrison v. Remington Paper Co., 140 F. 385, 72 C.C.A. 405, 3 L.R.A. (N.S.) 954, 5 Ann.Cas. 314; Union Central Life Ins. Co. v. Drake, 214 F. 536, 131 C.C.A. 82; Troxell v. Del., Lack. & Western...