Ohio Oil Co. v. Thompson
| Decision Date | 14 July 1941 |
| Docket Number | No. 11915-11917.,11915-11917. |
| Citation | 120 F.2d 831 |
| Parties | OHIO OIL CO. et al. v. THOMPSON. MAGNOLIA PETROLEUM CO. v. SAME. OHIO OIL CO. v. SAME. |
| Court | U.S. Court of Appeals — Eighth Circuit |
Fred H. Kelly, of Mattoon, Ill., and William H. Armstrong, of St. Louis, Mo. (Thomas H. Cobbs, of St. Louis, Mo., and Craig Van Meter, of Mattoon, Ill., on the brief), for appellants.
Thomas T. Railey, of St. Louis, Mo. (Russell L. Dearmont, of St. Louis, Mo., on the brief), for appellee.
Before SANBORN, WOODROUGH, and THOMAS, Circuit Judges.
This appeal arises out of proceedings in the district court subsequent to the decision of the Supreme Court in Thompson, Trustee, v. Magnolia Petroleum Co. et al., 309 U.S. 478, 60 S.Ct. 628, 84 L.Ed. 876. In that case the Supreme Court reversed the decision of this court in Magnolia Petroleum Co. v. Thompson, 8 Cir., 106 F.2d 217. The former appeal to this court was from an interlocutory decree in bankruptcy entered by the district court for the eastern district of Missouri. The issues arose in that court in summary proceedings under § 77 of the Bankruptcy Act, 11 U.S.C.A. § 205, for the reorganization of the Missouri-Illinois Railroad Company, Debtor, a subsidiary of the Missouri Pacific Railroad Company in reorganization in the same proceeding. The trustee petitioned the court to determine title to certain of its right of way land traversing an oil field in Illinois under which the oil was claimed by the oil companies, and for advice and directions pending the determination of title.
The trustee in his petition alleged that a fee-simple title to the right of way land vested in his predecessor under deeds from the former owners and by adverse possession, and that unless he was permitted to enter into a contract for drilling wells on the right of way, extracting the oil and gas and marketing it, the oil and gas would be drawn off through wells drilled on the adjacent lands pending the determination of title. The oil companies claimed that the deeds relied upon by the trustee conveyed only railroad right of way easements and that the fee remained in the grantors under whom the oil companies claimed by virtue of oil leases. They denied the summary jurisdiction of the court to hear and determine the controversy.
The court in an interlocutory order entered November 14, 1938, found that the trustee was in actual possession of the property under a claim of fee-simple ownership and that the court accordingly had summary jurisdiction to determine title.
The court also found that immediate action was necessary to conserve the oil and gas for the benefit of the parties in interest as their rights and title might thereafter be determined.
The interlocutory order enjoined all parties from asserting any adverse claim to the property or to the oil or gas underlying the premises "other than in these proceedings". The trustee was authorized to drill wells, to remove the oil and gas, to sell the same, and after deducting the expenses to impound the remainder of the proceeds for the account of the adverse claimants as their rights might afterwards be determined.
The summary jurisdiction of the court depended upon whether the trustee was in the actual or constructive possession of the property, title to which was in dispute. Upon appeal to this court by the oil companies counsel for the parties agreed "that if the deeds grant and convey a railroad right of way easement only, such possession of the trustee did not extend either actually or constructively to the oil and gas underlying the right of way." 106 F.2d 222. With this understanding this court undertook to construe the language of the deeds. We held that the deeds conveyed a railroad right of way easement only and not a fee-simple title; that the grantee in possession under a deed cannot claim adversely a larger estate in the land granted than is described in his deed; and that the trustee having neither actual nor constructive possession of the fee, the court was without power to determine ownership in a summary proceeding in bankruptcy. We accordingly reversed the interlocutory order with directions to dismiss the trustee's petition for want of jurisdiction.
Upon appeal to the Supreme Court the decision of this court was reversed and the order of the district court was affirmed with a single modification hereinafter noted.
The mandate of the Supreme Court, under date of April 24, 1940, addressed to the "Judges of the District Court of the United States for the Eastern District of Missouri", provided:
"It is now here ordered, adjudged and decreed by this Court that the decree of the said United States Circuit Court of Appeals in this cause be, and the same is hereby, reversed with costs, and that the decree of the District Court, in this cause, be, and the same is hereby, affirmed except insofar as it provides for adjudication of the disputed ownership in the bankruptcy court.
* * * * *
"And it is further ordered, That this cause be, and the same is hereby remanded to the District Court of the United States for the Eastern District of Missouri with instructions to modify its order so as to provide appropriate submission of the question of fee simple ownership of the right of way to the Illinois State Courts.
* * * * *
"You, therefore, are hereby commanded that such execution and further proceedings be had in said cause, in conformity with the opinion and decree of this Court, as according to right and justice, and the laws of the United States ought to be had, * * *." (Italics supplied.)
* * * * *
"This court reserves jurisdiction to amplify or modify this order as may hereafter be deemed proper, and reserves jurisdiction to enter final order after final decisions have been obtained in the litigation herein directed to be instituted in the State Courts of Illinois."
Pursuant to the directions of the court the trustee instituted two suits in the Circuit Court of Marion County, Illinois, to quiet title to the fee-simple title to the strip of land in dispute. The oil companies filed answers and counterclaims. In the counterclaims the oil companies prayed (1) for a permanent injunction restraining the trustee from drilling for oil and gas on the land title to which was in dispute; (2) for an accounting for the oil and gas produced from the premises and marketed and sold by the trustee pursuant to the interlocutory order of the court, and (3) for damages for trespass upon the premises.
On November 16, 1940, upon motion of the trustee, to which the oil companies objected, the court amplified its order of May 24, 1940, by an order providing that "Pending determination in the courts of Illinois of `the question of fee-simple ownership of the right of way in question, and the entry of an appropriate order by this court in conformity with the construction of the conveyances in question by the Illinois Courts'" the orders of the court should not be construed (1) to permit the oil companies to seek in the Illinois courts through counterclaim or otherwise an order enjoining the trustee from drilling and conserving the oil and gas from the right of way, nor (2) to permit an accounting, nor (3) to permit appellants to seek damages for trespass, and reserving exclusive jurisdiction in the district court to determine these questions. This order in effect enjoined the oil companies from prosecuting the counterclaims in the state courts.
The present appeal is from the order of November 16, 1940, amplifying and amending the order of May 24, 1940. It is the contention of appellants (1) that the order is appealable under § 129 of the Judicial Code, 28 U.S.C.A. § 227, and (2) that properly construed the mandate of the Supreme Court does not limit the right of the parties to a partial determination of their rights in the suits instituted in the courts of Illinois. It is contended that when by direction of the bankruptcy court the trustee commenced the plenary suits in the Circuit Court of Marion County, Illinois, jurisdiction was relinquished to that court and the trustee became an ordinary litigant with the same burdens and liabilities that any litigant would have in a similar case; that when a trustee in bankruptcy, with authority to do so, enters a state court to litigate his right to property, the state court taking jurisdiction of the litigation has jurisdiction of all the incidents of the issues; that the order appealed from is in excess of the directions of the mandate and therefore beyond the jurisdiction of the district court; and that the order is in effect a refusal on the part of the district court to enforce the mandate.
The appellee contends (1) that the alleged failure of the district court properly to construe and obey the mandate of the Supreme Court cannot be reviewed by this court on appeal, and (2), that the district court did obey and properly construe the mandate.
The paramount question presented by these contentions for our determination is the extent of the jurisdiction of this court. In approaching the consideration of that question we are guided by certain wellsettled rules. The first and most fundamental of these rules, affirmed in cases too numerous for citation, is that: ...
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