Stanolind Crude Oil Purchasing Co. v. Busey

• Decision Date: 02 May 1939
• Docket Number: 28381,28478.
• Citation: 90 P.2d 876,185 Okla. 200,1939 OK 234
• Parties: STANOLIND CRUDE OIL PURCHASING CO. v. BUSEY. BUSEY v. TEMPLEMAN.
• Court: Oklahoma Supreme Court

90 P.2d 876

185 Okla. 200, 1939 OK 234

STANOLIND CRUDE OIL PURCHASING CO. v. BUSEY.

BUSEY v. TEMPLEMAN.

Nos. 28381, 28478.

Supreme Court of Oklahoma

May 2, 1939

Rehearing Denied May 31, 1939.

Syllabus by the Court.

1. A laborer's or materialman's lien upon an oil and gas lease, leasehold, well, etc., under the provisions of section 10978, O.S.1931, 42 Okl.St.Ann.§ 144, attaches only to such property as is specifically mentioned therein and does not apply to oil as and when produced.

2. Where oil has been produced from premises leased for oil and gas purposes while proceedings are pending to foreclose laborer's and materialmen's lien against the lease leasehold, wells, etc., and the oil has been sold and delivered to a purchaser, but not paid for, the proceeds from the oil are not brought into the custody of the law subject to the power and control of the court because of the pending action to foreclose the lien, the only property brought into custodia legis by the action to foreclose the lien being the specific property to which the lien applies.

Appeal from District Court, Hughes County; H. H. Edwards, Judge.

Appeal from District Court, Tulsa County; H. L. S. Halley, Judge.

Consolidated actions by lien claimants of one Pringle and one Marshall to foreclose their liens, wherein Clyde Busey was appointed receiver. Action by the Murray Tool & Supply Company apparently as a general creditor, against one Pringle and one Marshall, wherein Neil Templeman was appointed as receiver wherein Clyde Busey filed a plea of intervention. From a judgment in favor of Neil Templeman and against Clyde Busey and the Standolind Crude Oil Purchasing Company in the latter action, Clyde Busey appeals making the Stanolind Company a defendant in error. From an order and judgment in the former action directing the Stanolind Company to pay money in controversy to Clyde Busey, the Stanolind Company appeals. The cases are consolidated on appeal.

Appeal in later case dismissed, and order and judgment in former case reversed.

RILEY and CORN, JJ., dissenting.

L. G Owen, amici curiae for Carter Oil Co.

M. D. Kirk and Gentry Lee, both of Tulsa, amici curiae for Barnsdall Oil Co.

Alvin Molony, of Tulsa, amici curiae for Skelly Oil Co.

J. C. Denton, R. H. Wills, J. H. Crocker, I. L. Lockewitz, and J. P. Greve, all of Tulsa, amici curiae for Mid-Continent Petroleum Corporation.

WELCH Vice Chief Justice.

Herein is presented the question of which of two receivers, the one appointed by the District Court of Hughes County, and the other appointed by the District Court of Tulsa County, is entitled to proceeds from the sale of oil produced from certain premises under oil and gas leases held by Pringle and Marshall, lessees, while labor and materialmen's lien claims were being foreclosed in the District Court of Hughes County. The leased premises were located in Hughes County. Actions to foreclose the liens were commenced in Hughes County June 5, and June 12, 1933. These actions were later consolidated. No receiver was appointed at the time. On June 14, 1933, an action against Pringle and Marshall was commenced in the District Court of Tulsa County by Murray Tool & Supply Company, apparently as a general creditor. On the next day Neil Templeman was appointed receiver by the Tulsa County District Court, with directions to take possession of all the property and assets of Pringle and Marshall wherever located within the State of Oklahoma. Pursuant thereto he took possession of the oil and gas leases in Hughes County involved in the foreclosure action then pending in Hughes County. The leases from which oil was produced, involved in this action, are known as the "Church Lot Lease," the "Atkins Lease," and the "Genter Lease." Templeman, as such receiver, operated said leases, and, under certain "division orders," sold the oil produced therefrom to the Stanolind Oil Purchasing Company. Payment therefor was made to Templeman, receiver, down to January 1, 1934. Thereafter, pursuant to notice from counsel for the lien claimants in the Hughes County case, it withheld payment for oil delivered between January 1, and April 18, 1934, (March 16, 1934, on the "Church Lot Lease,") amounting to $3,142.36.

On March 5, 1934, after many lien claimants, including Murray Tool & Supply Company, had intervened and presented their lien claims, judgment was entered in the Hughes County case establishing and foreclosing liens aggregating in amount some $32,000. On the same day a receiver was appointed in the Hughes County case, with directions to take possession of, advertise and sell the oil and gas leases, leasehold estates, etc. Some controversy then arose as to the right of possession as between the two receivers, but on March 16, and April 18, 1934, Templeman, receiver, relinquished possession to the Hughes County receiver, and thereafter Stanolind Company paid the Hughes County Receiver for oil produced after said dates, until the sale of the property pursuant to the order and judgment of the Hughes County Court. In the meantime the claim of the Atlas Supply Company for payment for supplies sold to Templeman, receiver, arose, resulting in an appeal to this court and decided by this court April 6, 1937, in Atlas Supply Company v. Roberts, 180 Okl. 100, 68 P.2d 76.

Proceedings in the Tulsa and Hughes County cases appear to have been suspended pending the appeal in the Atlas Supply Company case. In the meantime Clyde Busey was appointed receiver in the Hughes County case. The Stanolind Company admits that it owes said sum of $3,142.36 for oil purchased by it between January 1, and April 18, 1934.

Hereafter the Tulsa County Receiver will be referred to as "Templeman," and the Hughes County Receiver will be referred to as "Busey."

The record discloses that Templeman appeared in the Hughes County case, and made claim to the funds involved, and that Busey appeared in the Tulsa County case and made claim to the same fund. The Stanolind Company was made a party in the Hughes County case, and an order was issued in the Tulsa County case for the Stanolind Company to appear and show cause why it should not be required to pay the money to Templeman. Both courts entered orders directing the Stanolind Company to pay their respective receivers. But on motion for new trial both orders were vacated and new trial granted.

On June 18, 1937, without further order having been made in the Murray Tool & Supply Company case in Tulsa County, Templeman commenced a separate action in the district court of Tulsa County against the Stanolind Company to recover the money in question. Stanolind Company answered and set up the adverse claim of Busey, filed the affidavit provided for in Section 159, O.S.1931, 12 Okl.St.Ann. § 238, and asked that Busey be brought in as a party. Plea of intervention was filed by Busey setting up the proceedings had in Hughes County and claiming that the leased premises, including the money in question, were at all times after June 5, 1933, in custodia legis and subject to the exclusive control and judgment of the District Court of Hughes County. Trial was had in Tulsa County, resulting in a judgment in favor of Templeman and against Busey and the Stanolind Company. From this judgment Busey appeals, making the Stanolind Company a party defendant in error.

The District Court of Hughes County, on July 29, 1937, with all the parties in interest before it, entered an order and judgment directing the Stanolind Company to pay Busey the money in controversy, and the Stanolind Company appeals. The two cases are here consolidated.

Busey contends:

(1) That the District Court of Tulsa County is without jurisdiction over the subject-matter in controversy.

(2) The property and funds were in custodia legis and under the jurisdiction of the District Court of Hughes County; and

(3) That Busey, as receiver representing judgment creditors on deficiency judgments, has an equitable lien upon the funds in question superior to that of Templeman, receiver.

The Stanolind Company, in its petition in error, aside from the assignment that the court erred in overruling its motion for new trial in the Hughes County case, assigns as error only that the court erred in rendering judgment against the Stanolind Company.

In Atlas Supply Co. v. Roberts, supra, dealing with the identical leases involved it was held that the property in controversy was in custodia legis after the action was commenced in Hughes County, although actual physical possession of the property involved was not taken by any officer, receiver or other representative of the court.

In State ex rel. Ketchum v. District Court of Tulsa County, 82 Okl. 54, 198 P. 480, it was held: "Where in an action a petition has been filed to enforce a lien against specific property, process issued and served as required by law in a court of competent jurisdiction, the property involved in the action is brought into custodia legis, subject to the power and control of the court, and no other court of co-ordinate or concurrent jurisdiction can, in an action commenced while the property is in such a situation, deprive the court, which has already acquired the right of control and possession of such property, of its jurisdiction; and the control of said property and jurisdiction of the court in which the action is first filed is not dependent upon actual physical possession of said property, but the court in which said action is first commenced is entitled to the possession of the res, because its possession of the same is indispensable to the exercise of its jurisdiction to the end that the res may be impressed by its decree.

It was determined in the Atlas Supply Company case that the district court of Hughes county had...