Oil Co v. Kieffer, KINNEY-COASTAL
Decision Date | 04 June 1928 |
Docket Number | KINNEY-COASTAL,No. 64,64 |
Citation | 72 L.Ed. 961,277 U.S. 488,48 S.Ct. 580 |
Parties | OIL CO. et al. v. KIEFFER et al |
Court | U.S. Supreme Court |
[Syllabus from pages 488-490 intentionally omitted] This case presents a controversy over the relative rights conferred by an oil and gas lease and by a homestead patent for the same lands-both issued by the United States and each containing a reservation of the rights conferred by the other.
The lands in question are two adjoining 40-acre tracts within the Salt Creek oil field, in Natrona county, Wyoming, which became a producing field, widely known as such, before any step was taken to secure either the lease or the patent.
By executive order issued July 2, 1910, under the Act of June 25, 1910, c. 421, 36 Stat. 847 (43 USCA § 141) these lands-being then public lands of the United States-were withdrawn from settlement, location, sale, or entry under the existing public land laws and were reserved as being valuable for oil to await further legislation respecting the disposal of lands of that character. The contemplated legislation came in part in the Act of July 17, 1914, c. 142, 38 Stat. 509 (30 USCA § 122), and in part in the Act of February 25, 1920, c. 85, 41 Stat. 437 (30 USCA § 181).
The act of 1914 looks to the severance and separate disposal of the surface and the underlying minerals. It provides that lands of the United States withdrawn, classified, or reported as valuable for oil, gas, or other designated mineral deposits shall be subject to disposal under the nonmineral land laws, but that the disposal shall be with 'a reservation to the United States of the deposits on account of which the lands were withdrawn or classified or reported as valuable, together with the right to prospect for, mine, and remove the same,' and that such deposits shall be 'subject to disposal by the United States only as shall be hereafter expressly directed by law.' The act further provides:
The act of 1920 relates particularly to the disposal of oil, gas and other designated mineral deposits in the lands of the United States, including those specified in the act of 1914. In the main it provides that the disposal of such deposits shall be through leases entitling the lessees to extract and remove the deposits and to make such use of the surface as may be necessary for that purpose, and requiring the lessees to pay fixed royalties, and in some instances a further compensation, to the United States. The parts of the act having a present bearing are as follows:
* * *'30 USCA § 226.
* * *'30 USCA § 186.
* * *'30 USCA § 189.
April 2, 1920, the Secretary of the Interior, pursuant to section 32 of the act of 1920, determined the boundary lines of the known oil structure or deposit in the Salt Creek field. The lines so determined included the two 40 acre tracts in question.
December 29, 1921, as a result of competitive bidding invited under section 17 of that Act, and in consideration of a bonus of $51,750 paid to the United States, the Secretary of the Interior, conformably to existing regulations, 1 awarded and issued to Oscar W. Rohn a lease of the oil and gas in these tracts and in another 40-acre tract in the same field. The lease was given for a term of 20 years, with a conditional privilege of renewal under section 17, and granted to the lessee the exclusive right to drill for, extract and remove the oil and gas deposits in the three tracts, together with the right to construct and maintain on the surface 'all works, buildings, plants, waterways, roads, telegraph or telephone lines, pipe lines, reservoirs, tanks, pumping stations or other structures' needed in such mining operations. It required the lessee to exercise reasonable diligence in drilling and operating wells for oil and gas and to pay to the United States a royalty of 25 per cent. on the oil produced and a royalty varying from 12 1/2 per cent. to 16 2/3 per cent. on the gas; and it reserved to the United States the right to dispose of 'the surface of the lands' under existing or future laws 'in so far as said surface is not necessary for the use of the lessee in the extraction and removal of the oil and gas.' It also required the lessee—
'to comply with all statutory requirements and regulations thereunder, if the lands embraced herein have been or shall hereafter be disposed of under the laws reserving to the United States the deposits of oil and gas therein, subject to such conditions as are or may hereafter be provided by the laws reserving such oil or gas.'
At the time the lease was issued the lessee, pursuant to the existing regulations,2 executed, with approved surety, a bond to the United States in the amount of $5,000-'for the use and benefit of the United States and of any entryman or patentee of any portion of the land * * * heretofore entered or patented with a reservation of the oil and gas deposits to the United States'-conditioned on the lessee's faithful compliance with 'all the provisions' of the lease.
August 9, 1922, that lease was consolidated with others into a new lease of like character and tenor issued by the Secretary of the Interior to the Kinney-Coastal Oil Company, and a bond like that above described was gived by the company, with approved surety, to secure its faithful compliance with all the provisions of the consolidated lease.
In 1918 Michael F. Kieffer made application at the local land office to make a preliminary homestead entry of the two 40-acre tracts in question and other contiguous lands. He knew the lands were within the executive withdrawal of July 2, 1910, and the Salt Creek oil field, and he assented that, if his application was granted, the oil and gas deposits should be reserved by the United States for disposal under future laws as contemplated in the act of 1914. The preliminary homestead entry was allowed with that reservation (see Regulations of March 20, 1915, paragraphs 5-8, 44 L. D. 32, 34) and in due course was carried to a final entry, on which a homestead patent was issued to Kieffer October 12, 1923. The patent was for 320 acres, including the two 40-acre tracts in question, and contained the following exception and reservation:
'Also excepting and reserving to the United States all the oil and gas in the lands so patented, and to it, or persons authorized by it, the right to prospect for, mine and remove such deposits from the same upon compliance with the conditions and subject to the provisions and limitations of the Act of July 17, 1914.'
After his preliminary homestead entry was allowed, Kieffer constructed a residence and several outbuildings on part of the lands included therein other than the tracts in question, and resided there with his family. He inclosed the tracts in question with a barbed wire fence and in each of two years planted and harvested about 7 acres of oats thereon; but in no other way did he improve...
To continue reading
Request your trial-
United Electric Coal Companies v. Rice
...35 S.Ct. 543, 59 L.Ed. 955; Zenith Carburetor Co. v. Stromberg Motor Devices Co., 7 Cir., 270 F. 421, 424; Kinney-Coastal Oil Co. v. Kieffer, 277 U.S. 488, 48 S.Ct. 580, 72 L.Ed. 961; Maytag Co. v. Meadows Mfg. Co., 7 Cir., 45 F.2d 299, 301, certiorari denied, 283 U.S. 843, 51 S. Ct. 489, 7......
-
Health Freedom Def. Fund, Inc. v. Biden
...the determination of legal rights which otherwise would not be within the range of its authority." Kinney-Coastal Oil Co. v. Kieffer , 277 U.S. 488, 507, 48 S.Ct. 580, 72 L.Ed. 961 (1928) ; see also Trump v. Hawaii , ––– U.S. ––––, 138 S. Ct. 2392, 2427, 201 L.Ed.2d 775 (2018) (Thomas, J., ......
- State v. Tucker
-
Crow Tribe of Indians v. Peters
...production, it did specify that the minerals could be “leased for mining purposes.” 41 Stat. 753. In Kinney–Coastal Oil Co. v. Kieffer, 277 U.S. 488, 48 S.Ct. 580, 72 L.Ed. 961 (1928), the Court reviewed the Mineral Leasing Act of 1920, and earlier legislation wherein Congress addressed the......
-
Future prospects for mining and public land management: the federal 'retention-disposal' policy enters the twenty-first century.
...C. [section] 299 (1994)). (95) 30 U.S.C. [section] 122 (1994); 43 U.S.C. [section] 299 (1994). (96) Kinney-Coastal Oil Co. v. Kieffer, 277 U.S. 488, 504 (1927). (97) This trilogy includes the Act of July 26, 1866, ch. 262, [section] 1, 14 Stat. 251 (codified as amended at 30 U.S.C. [subsect......
-
RELATIVE PROPERTY INTERESTS ON THE FEDERAL OIL AND GAS LEASE
...The underlying principles of surface use rights on federal split estate are generally reflected in Kinney-Coastal Oil Co. v. Kieffer, 277 U.S. 488 (1928). d) Reclamation statutes Reclamation statutes create new rights in the surface estate by mandating specific performance, regulated by the......
-
CHAPTER 3 CHANGING CONCEPTS IN THE DOMINANCE OF THE MINERAL ESTATE
...299 (1988). [13] Act of July 17, 1914, 38 Stat. 509, codified as 30 U.S.C. §§ 121 and 122 (1988). [14] Kinney-Coastal Oil Co. v. Kieffer, 277 U.S. 488, 504 (1927). [15] See generally Kinney-Coastal, supra note 14; Mountain Fuel Supply Co. v. Smith, 471 F.2d 594 (10th Cir. 1973); Gilbertz v.......
-
CHAPTER 9 LEGAL ISSUES PRESENTED BY CHECKERBOARD, INHOLDING, AND SPLIT ESTATE LANDS
...Act of 1862, ch. 75, 12 Stat. 392; Desert Lands Act of 1877, ch. 107, 19 Stat. 377. [2] See, e.g., Kinney-Coastal Oil Co. v. Kieffer, 277 U.S. 488 (1928) (addressing surface use rights where government reserved minerals). [3] See, e.g., March 16, 1995 Hearings Before the Subcomm. on Nationa......