Terry v. Midwest Refining Co.

• Decision Date: 31 March 1933
• Docket Number: No. 697.,697.
• Citation: 64 F.2d 428
• Parties: TERRY et ux. v. MIDWEST REFINING CO.
• Court: U.S. Court of Appeals — Tenth Circuit

64 F.2d 428 (1933)

TERRY et ux. v. MIDWEST REFINING CO.^*

No. 697.

Circuit Court of Appeals, Tenth Circuit.

March 31, 1933.

C. R. Brice, of Roswell, N. M., and A. H. Darden, of Raton, N. M. (M. A. Sanchez, of Santa Fé, N. M., E. C. Crampton, of Raton, N. M., and Ellis Douthit, of Abilene, Tex., on the brief), for appellants.

J. O. Seth, of Santa Fé, N. M. (R. J. Fellingham, of Chicago, Ill., A. C. Campbell, of Cheyenne, Wyo., and A. K. Barnes, of Denver, Colo., on the brief), for appellee.

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

LEWIS, Circuit Judge.

This action was instituted in the court below by appellants, husband and wife, for the alleged purpose of recovering possession of 80 acres of land in Lea County, New Mexico. They claim under patent from that state, and alleged that they are owners of the 80 acres in fee simple, and asked —

"that they have judgment for the possession of said premises, and ejecting the defendant therefrom, for the sum of $1,015,000.00 damages, that the plaintiffs be adjudged the owners of such premises in fee simple, and that defendant be adjudged to have no right, title or interest therein, and for such other and further relief as they may be entitled to in the premises."

In their reply to the defendant's answer — "plaintiffs state that this is an action in ejectment only, as provided by the statutes of the State of New Mexico, and that they are seeking the relief against the defendant as authorized by the law of ejectment, and for no other purpose, and ask no other relief except as provided and authorized in an action of ejectment."

The parties waived a jury. The judge heard the proof and made findings of fact and conclusions of law, among others:

"This is an action (of) ejectment, and in such a proceeding the plaintiffs must stand on the legal title — that is, the patent referred to in the foregoing findings of fact."

Appellants' brief opens with, "This is an action in ejectment * * * for the possession of eighty acres of land. * * *" A copy of the patent issued by the state of New Mexico on September 9, 1930, to Will Terry, one of the appellants, conveying to him the land in question was attached to the complaint and made a part of it by reference. Following the granting clause is this reservation:

"And reserving also to the State of New Mexico all minerals of whatsoever kind, including oil and gas, in the lands so granted, and to it, or persons authorized by it, the right to prospect for, mine, produce and remove the same, and perform any and all acts necessary in connection therewith, upon compliance with the conditions and subject to the limitations of the laws of the State of New Mexico, such tract of land so conveyed being a portion of the lands granted to the State of New Mexico by the United States, pursuant to the Act of Congress approved June 21, 1898, and June 20, 1910."

There is also a copy of an oil and gas lease given by the state of New Mexico to appellee of date October 18, 1928, attached to the complaint and by reference made a part of it. It conclusively appears from appellee's answer and the proof in support thereof that the only claim it makes and has is under that lease, that it has put down two oil wells on said 80 acres and has produced large quantities of oil and gas therefrom, and that it has used and is using only a sufficient amount of the surface for that purpose. Under said lease appellee has bound itself and is obligated to pay the royalties therein reserved to the state of New Mexico. In no other respect has it interfered or is it interfering with appellants' rights in and to said 80 acres. Hence it appears appellants did not and do not own the fee and cannot maintain in the federal courts an action of ejectment ousting the appellee. Carter v. Ruddy, 166 U. S. 493, 17 S. Ct. 640, 41 L. Ed. 1090; Fenn v. Holme, 21 How. 481, 16 L. Ed. 198; Sanford v. Sanford, 139 U. S. 642, 11 S. Ct. 666, 35 L. Ed. 290; McGrew v. Byrd (C. C. A.) 257 F. 66; Ewert v. Robinson (C. C. A.) 289 F. 740. In St. Louis Smelting & Refining Co. v. Kemp, 104 U. S. 636, 26 L. Ed. 875, the action was ejectment for land patented to another. At page 647 of 104 U. S., the court said:

"If in issuing a patent its officers of the United States took mistaken views of the law, or drew erroneous conclusions from the evidence, or acted from imperfect views of their duty, or even from corrupt motives, a court of law can afford no remedy to a party alleging that he is thereby aggrieved."

Treating the action as one in ejectment, it seems clear that the order of dismissal should be affirmed.

But we hesitate to so restrict the pleadings. They embody allegations on the part of appellants that present claimed equitable rights to the minerals. The complaint and the exhibits attached thereto which by reference are made a part of the complaint cover forty-five pages of the record. The answer and the exhibits attached to it cover twenty-five pages of the record, and the appellants' reply thereto twenty-six pages. The complaint may with more reason be taken as a bill in equity to quiet appellants' claimed title to the minerals. We, of course, realize that estimate of the complaint puts appellants out of court because of the absence of New Mexico, an indispensable party, as we held in the like case of Skeen v. Lynch, 48 F.(2d) 1044. But we proceed to a consideration of the merits of the real issue and controversy. Do appellants own the minerals under this eighty acres, or do they belong to the state of New Mexico?

Prior to statehood, January 6, 1912, the eighty acres was a part of the public domain. By section 7 of the Enabling Act (36 Stat. 557, 562) Congress donated to the state in trust 100,000 acres for schools and asylums for the deaf, dumb and blind, and this tract was a part thereof. Parts of section 10 of said act (36 Stat. 563) are material to this inquiry, and are as follows:

"That it is hereby declared that all lands hereby granted, including those which, having been heretofore granted to the said Territory, are hereby expressly transferred and confirmed to the said State, shall be by the said State held in trust, to be disposed of in whole or in part only in manner as herein provided and for the several objects specified in the respective granting and confirmatory provisions, and that the natural products and money proceeds of any of said lands shall be subject to the same trusts as the lands producing the same.

"Disposition of any of said lands, or of any money or thing of value directly or indirectly derived therefrom, for any object other than that for which such particular lands, or the lands from which such money or thing of value shall have been derived, were granted or confirmed, or in any manner contrary to the provisions of this Act, shall be deemed a breach of trust.

"No mortgage or other incumbrance of the said lands, or any thereof, shall be valid in favor of any person or for any purpose or under any circumstances whatsoever. Said lands shall not be sold or leased, in whole or in part, except to the highest and best bidder at a public auction to be held at the county seat of a county wherein the lands to be affected, or the major portion thereof, shall lie, notice of which public auction shall first have been duly given by advertisement, which shall set forth the nature, time, and place of the transaction to be had, with a full description of the lands to be offered, and be published once each week for not less than ten successive weeks in a newspaper of general circulation published regularly at the state capital, and in that newspaper of like circulation which shall then be regularly published nearest to the location of such lands so offered; nor shall any sale or contract for the sale of any timber or other natural product of such lands be made, save at the place, in the manner, and after the notice by publication thus provided for sales and leases of the lands themselves: Provided, That nothing herein contained shall prevent said proposed State from leasing any of said lands referred to in this section for a term of five years or less without said advertisement herein required.

"All lands, leaseholds, timber, and other products of land before being offered shall be appraised at their true value, and no sale or other disposal thereof shall be made for a consideration less than the value so ascertained, nor in any case less than the minimum price hereinafter fixed, nor upon credit unless accompanied by ample security, and the legal title shall not be deemed to have passed until the consideration shall have been paid. * * *

"Every sale, lease, conveyance, or contract of or concerning any of the lands hereby granted or confirmed, or the use thereof or the natural products thereof, not made in substantial conformity with the provisions of this Act shall be null and void, any provision of the constitution or laws of the said State to the contrary notwithstanding.

"It shall be the duty of the Attorney-General of the United States to prosecute in the name of the United States and its courts such proceedings at law or in equity as may from time to time be necessary and appropriate to enforce the provisions hereof relative to the application and disposition of the said lands and the products thereof and the funds derived therefrom.

"Nothing herein contained shall be taken as in limitation of the power of the State or of any citizen thereof to enforce the provisions of this Act."

The New Mexico Constitution provides that one of the executive officers of the state shall be the commissioner of public lands. Article 5, § 1. Article 13 of said Constitution deals with public lands, and section 2 thereof provides:

"The commissioner of public lands shall select, locate, classify, and have the direction, control, care and disposition of all public lands, under the provisions of the acts of congress relating thereto and such...