Skeen v. Lynch, 235.

• Decision Date: 30 March 1931
• Docket Number: No. 235.,235.
• Citation: 48 F.2d 1044
• Parties: SKEEN v. LYNCH et al.
• Court: U.S. Court of Appeals — Tenth Circuit

48 F.2d 1044 (1931)

SKEEN v. LYNCH et al.

No. 235.

Circuit Court of Appeals, Tenth Circuit.

March 30, 1931.

Tom W. Neal, of Lovington, N. M., for appellant.

J. M. Hervey, of Roswell, N. M. (Edward M. Freeman, of New York City, Reid, Hervey, Dow & Hill and Emmett Patton, all of Roswell, N. M., and G. U. McCrary, of Artesia, N. M., on the brief), for appellees.

Before LEWIS and COTTERAL, Circuit Judges, and POLLOCK, District Judge.

LEWIS, Circuit Judge.

The bill in this suit, dismissed on motion, contains two counts. The first alleges that appellant Skeen, plaintiff below, entered on February 8, 1924 for agricultural purposes and his homestead a described 640 acres of land in Lea County, New Mexico; that at the time of entry no part of the land had been withdrawn from entry as valuable for coal or gas, or as being on the structure of a producing oil and gas field, but had been classified as stockraising lands; that appellant's said entry was made under the Act of December 29, 1916 (39 Stat. 862 43 USCA § 291 et seq.), which provided that all the coal and other minerals shall be reserved to the United States; that plaintiff received on March 11, 1929 a certificate of payment in full for said land, and patent therefor issued to him on June 22, 1929. The patent, attached as an exhibit, contains this: "Excepting and reserving, however, to the United States all the coal and other minerals in the lands so entered and patented, together with the right to prospect for, mine, and remove the same pursuant to the provisions and limitations of the Act of December 29, 1916 (39 Stat. 862)." It is then alleged that plaintiff is the owner of the water, oil and gas in and under said land, and that "said reservation in the said Act of Congress only reserved to the United States the `coal and other minerals' of a solid and similar nature to coal", and did not reserve the oil and gas; that the defendants are claiming some interest or title to and right to produce and appropriate the water, oil and gas from said lands adverse to the title of plaintiff, which claims constitute a cloud on plaintiff's title. There is a prayer that plaintiff's title to the water, oil and gas in and under said lands be quieted and set at rest, and that defendants be perpetually enjoined from claiming any interest or right in the production of, or right to produce or take the water, oil or gas under said lands.

The second count alleges again plaintiff's entry and the issuance of patent to him; that plaintiff was by law the owner of and possessed of a preference right above all others to prospect for and produce oil and gas from said land; that defendant Lynch, with full knowledge of plaintiff's preference rights, applied, after plaintiff had entered the land, to the Land Department for a permit to prospect for and drill for oil and gas on said 640 acres, and the Secretary of the Interior in May, 1926 issued to her such permit and in event of discovery she was to receive an oil and gas lease from the United States; that plaintiff had no knowledge of the application for said permit nor of its issuance until long thereafter; that the Secretary in issuing said permit erred in his construction of the Act of February 25, 1920 (41 Stat. 437) in holding that plaintiff had no preference right to a permit and lease upon said land and in issuing said permit to Beulah V. Lynch without notice to him, and he was thereby deprived of his said right without due process of law. That Beulah V. Lynch and her co-defendants, to whom she had assigned some right or interest in and to said permit and a prospective oil and gas lease on said lands in the event of discovery, have thereby constituted themselves trustees for plaintiff of the rights which they obtained and expect to procure under said permit; that all of said assigns took their assignments with knowledge of plaintiff's preference right. The prayer on this count, in the alternative and in the event plaintiff is denied relief on the first count, is: "That the title to said permit covering the lands described herein, so issued to the said Beulah V. Lynch, be decreed to be in the plaintiff herein, and that the title therein and thereto be forever quieted in this plaintiff, and that the defendants and each of them be, upon the final hearing hereof, forever restrained and enjoined from claiming or asserting any right, title or interest therein or thereto adverse to the rights of this plaintiff."

As to the first cause of action, the court is of the opinion that the United States is an indispensable party. The plaintiff asserts title to the oil and gas under the said 640 acres. The United States in its patent conveying the lands to appellant excepted and reserved to itself "all the coal and other minerals in the land so entered and patented, together with the right to prospect for, mine, and remove the same pursuant to the provisions and limitations of the Act of December 29, 1916 (39 Stat. 862)"; and in its certificate of final proof and payment issued to plaintiff March 11, 1929, this was contained: "Patent to contain reservation of coal and other minerals, and conditions and limitations as provided by Act of December 29, 1916 (39 Stat. 862)." The bill shows that defendants named claim no interest in the oil and gas other than as permittees and prospective lessees of the United States. The interest of the United States in the subject matter in litigation is not less obvious and substantial than it was in the case of Louisiana v. Garfield, 211 U. S. 70, 29 S. Ct. 31, 53 L. Ed. 92, in which it was held to be an indispensable party. The bill discloses the claim of ownership of the oil and gas made by the United States. Section 9 of the Stockraising Homestead Act (39 Stat. 862 43 USCA § 299) expressly provides that all the coal and other minerals in the land so entered shall be reserved to the United States, and that all entries and patents shall so state, and that there shall also be reserved the right to prospect for, mine and remove the minerals reserved, and that they shall be disposed of by the United States in accordance with the coal and mineral land laws. A decree for plaintiff on the first count would be a cloud on the title of the United States, and its permittee and prospective lessee would be subject to ouster if she continued to attorn to the United States. In New Mexico v. Lane, 243 U. S. 52, 37 S. Ct. 348, 61 L. Ed. 588, the state claimed title to forty acres under Congressional grant and prayed that it be adjudged the...