Pauline Oil & Gas Co. v. Fischer

• Decision Date: 21 October 1941
• Docket Number: 27931.
• Citation: 130 P.2d 305,191 Okla. 346,1941 OK 341
• Parties: PAULINE OIL & GAS CO. v. FISCHER.
• Court: Oklahoma Supreme Court

130 P.2d 305

191 Okla. 346, 1941 OK 341

PAULINE OIL & GAS CO. v. FISCHER.

No. 27931.

Supreme Court of Oklahoma

October 21, 1941

Rehearing Denied April 14, 1942.

Application to File Second Petition for Rehearing Withdrawn Nov. 10 1942.

Syllabus by the Court.

1. When an Industrial Commission award in favor of an injured workman remains unpaid, and a lien is claimed pursuant to section 13373, O.S.1931, 85 Okl.Stat.Ann. § 49, and to enforce payment the award is entered on the judgment docket of the district court pursuant to section 13366, O.S.1931, 85 Okl.Stat.Ann. § 42, the award then "shall have the same force and be subject to the same law as judgments of the district court," and thereby a lien, equivalent to a judgment lien, is impressed upon all of the property of the judgment debtor which would be subject to the lien of an original district court judgment, but property of the judgment debtor which would not be subject to judgment lien upon an original district court judgment is not affected by such filing and entering of record of such award.

2. While an oil and gas lease which "grants, leases, and lets" certain land for oil and gas mining purposes conveys to the lessee an estate in the realty described therein, such interest is not real estate within the meaning of section 690, C.O.S.1921, 12 Okl.Stat. Ann. § 706, which gives a judgment creditor a lien upon the "real estate" belonging to the judgment debtor.

3. A lien upon property of an insolvent person obtained by issuance and levy of execution out of the state court, in less than four months preceding the filing of a petition in bankruptcy against said party, is rendered voidable by subsequent adjudication of bankruptcy, and a sheriff's sale on such execution to one with notice of such petition in bankruptcy may be set aside at the suit of the trustee.

4. A plaintiff seeking to quiet title and recover an oil and gas leasehold estate in lands, and certain materials, machinery tools and appliances thereon, must recover, if at all, on the strength of his own title; and if his title is based on purchase at sheriff's sale on execution nullified by the intervening bankruptcy of the judgment debtor, then such plaintiff has no title and cannot recover.

Appeal from District Court, Pawnee County; Thurman S. Hurst, Judge.

Action by Abe Fischer against Pauline Oil & Gas Company to quiet title to an oil and gas mining lease and for possession. From a judgment in favor of the plaintiff, the defendant appealed to the Oklahoma Supreme Court. To review the judgment of the Oklahoma Supreme Court, 185 Okl. 108, 90 P.2d 411, reversing the trial court's judgment, the plaintiff brought certiorari to the Supreme Court of the United States, which in 309 U.S. 294, 60 S.Ct. 535, 84 L.Ed. 764, reversed the judgment of the Supreme Court of Oklahoma and remanded the cause with directions.

Mandate of the United States Supreme Court conformed to and judgment reversed.

Priest & Belisle, T. G. Chambers, and James R. Eagleton, all of Oklahoma City, for plaintiff in error.

Hunt & Eagleton, of Tulsa, and Horace D. Ballaine, of Pawnee, for defendant in error.

GIBSON Justice.

This cause was here on a former occasion when the judgment of the trial court in favor of the plaintiff below was reversed. Pauline Oil & Gas Co. v. Fischer, 185 Okl. 108, 90 P.2d 411. It is now here on mandate of the Supreme Court of the United States, after reversal of our former judgment with directions to proceed in accordance with the opinion. Fischer v. Pauline Oil & Gas Co., 309 U.S. 294, 60 S.Ct. 535, 539, 84 L.Ed. 764.

The action was for possession and to quiet title to a certain oil and gas mining lease. Plaintiff below claimed by virtue of a sheriff's deed executed on foreclosure of a workman's lien allegedly arising under the Workmen's Compensation Act, 85 Okl.St.Ann. § 1 et seq., while defendant claimed title under an assignment from the trustee in bankruptcy of the judgment debtor.

The main issue was the validity of the alleged lien as against the trustee in face of the Bankruptcy Act voiding, under certain conditions, all liens obtained against an insolvent person within four months prior to the filing of a petition in bankruptcy against such insolvent, sec. 67, sub. f Bankruptcy Act of 1898, 11 U.S.C.A. § 107, sub. f. Proceeding on the theory that a determination of that question adversely to plaintiff would fully dispose of the case, we considered no further assignments.

The facts, circumstances and issues in the case are fully set out in Pauline Oil & Gas Co. v. Fischer, above, to which we here refer.

We held that the lien was obtained against the debtor when it was insolvent and within less than four months prior to filing the petition in bankruptcy, and that the same was therefore nullified by the subsequent adjudication of bankruptcy, and that the judicial sale under the lien passed no title to plaintiff.

The Supreme Court offers some criticism against our pronouncement in this regard, saying that we held that the section, above, by force of its own terms, and without regard to the exceptions therein contained, nullified the lien so that the property passed to the trustee discharged thereof, and that the sheriff's deed delivered pursuant to the lien was void.

In its opinion the Supreme Court has said that although section 67, sub. f, unequivocally declares that the lien shall be deemed null and void, and the property affected by it shall be deemed wholly discharged and released, the section makes it clear that this is so only under specified conditions. Those conditions, as pointed out in the opinion, are that at the date of creation of the lien the bankrupt must have been insolvent; the lien must have been acquired within four months of the filing of the petition in bankruptcy; and the property affected must not have been sold to a bona fide purchaser; and, furthermore, the lien is preserved if the trustee elects to enforce it for the benefit of the estate. The opinion then continues as follows: "These conditions create issues of fact which, as between the trustee, or one claiming under him, and the lienor, or one claiming by virtue of the lien, the parties are entitled to have determined judicially. The courses open to the trustee under the Bankruptcy Act of 1898 were to proceed to have the lien declared void, by plenary suit, or by intervention in the court where it was obtained, or by applying, in the bankruptcy cause, to restrain enforcement, as might be appropriate in the circumstances."

We gather from the Supreme Court's opinion that these issues were thought not to have been considered by us on reversal of the judgment, and that the same were not...