United States v. Brown

• Decision Date: 13 November 1926
• Docket Number: No. 18.,18.
• Citation: 15 F.2d 565
• Parties: UNITED STATES v. BROWN et al.
• Court: U.S. District Court — Northern District of Oklahoma

15 F.2d 565 (1926)

UNITED STATES v. BROWN et al.

No. 18.

District Court, N. D. Oklahoma.

November 13, 1926.

Louis N. Stivers, Asst. U. S. Atty., of Tulsa, Okl.

Wash E. Hudson and George W. Reed, Jr., both of Tulsa, Okl., for defendants Brown and Hudson.

Edgar A. De Meules, of Tulsa, Okl. (Ramsey, De Meules & Martin, of Tulsa, Okl., of counsel), for defendant Thompson & Black, Inc.

KENNAMER, District Judge.

This action was instituted by the United States in its own behalf and on behalf of Louisa Brown, against Louisa Brown and another, having as its object enjoining the defendants Louisa Brown and Wash Hudson from further prosecuting a suit which they had commenced against the other defendants in the district court of Tulsa county, Okl., and to further restrain these defendants from setting up or claiming any interest in and to an oil and gas mining lease upon certain restricted Indian lands. The land involved was allotted to one Charlie Berryhill, a full-blood member of the Creek Indian Tribe. On April 22, 1911, a departmental oil and gas mining lease was executed by the guardian of Charlie Berryhill, covering the allotment, to Minshall and Sweeney, which lease was approved by the Secretary of the Interior on the 14th day of July, 1911. It was provided in the lease that it was to continue for a term of 10 years from the date of approval and as long thereafter as oil or gas was found in paying quantities. On May 25, 1912, the lease was assigned to the Mary Oil & Gas Company. Charlie Berryhill died in February, 1918, leaving as his sole heir his mother, Louisa Brown, the defendant herein, who is also a full-blood member of the Creek Tribe of Indians.

The defendant Mary Oil & Gas Company drilled three gas wells upon the lands in controversy during the term of the lease, but two of the wells were soon plugged, and one gas well was connected with the pipe line. This well quit producing and ceased putting gas in the line on or about April 1, 1923, for at about this date the connections were broken and the well disconnected from the pipe line. An attempt was made to pull the tubing and packer, and the tubing parted above the packer. Upon attempting to pull the casing, at the same time, the casing parted and a great amount of mud, water, and débris partially filled the hole.

In accordance with the provisions of the lease, the Mary Oil & Gas Company, lessee, paid the Superintendent of the Five Civilized Tribes the sum of $300 per year, as royalty on a producing gas well, making its last payment December 7, 1923, subsequent to the disconnecting from the pipe line of the only gas well on the lease that had not been plugged. It was clearly shown that the royalty payment was made by officials and employees of the Mary Oil & Gas Company who had no personal knowledge concerning the physical condition of the well, or that it had not placed any gas in the pipe line for several months prior to the date of payment. This royalty payment was for the period expiring about December, 1924; but prior to the expiration of the period, on about February 10, 1924, the lessee hauled rig timbers upon the lease in question and shortly thereafter commenced the drilling of a well. The defendant Wash E. Hudson is a practicing attorney, and was employed by the defendant Louisa Brown to cancel the lease under which the Mary Oil & Gas Company had operated. On February 14, 1924, Louisa Brown executed an oil and gas mining lease to defendant Hudson, covering a portion of the lands in question, and also executed a contract of employment. The contract and lease to defendant Hudson were duly approved by the county court of Creek county, Okl.

In accordance with the terms of the contract, defendant Hudson filed a suit in the district court of Tulsa county, Okl., wherein Louisa Brown, defendant herein, was plaintiff, and the Mary Oil & Gas Company was defendant, seeking a judicial cancellation of the oil and gas lease involved herein and to quiet her title to the premises. The defendant Thompson & Black, Inc., with a view of purchasing the lease covering the land in controversy, investigated the records of the Superintendent of the Five Civilized Tribes, and was informed that the records showed the lease to be in good standing as a producing gas lease and that the royalty had been paid up until December, 1924. This information was given Thompson & Black, Inc., about February 13, 1924. On about February 15, 1924, the Superintendent for the Five Civilized Tribes caused a United States oil inspector to visit and examine the lease, whose report discloses that the gas well had been disconnected from the pipe line and that the hole was well filled with mud and water. He also reported that there was some gas in the well, by reason of the fact that it would light when a match was applied. Defendant Thompson & Black, Inc., made several inquiries concerning the validity of the lease, having knowledge of the action which had been filed in the district court of Tulsa county, Okl., for cancellation of the lease, and upon being informed by counsel and by the Superintendent that the lease was in good standing, purchased the same from the Mary Oil & Gas Company for a valuable consideration, which assignment was approved by the Secretary of the Interior. A stipulation was made by the parties to the action in the state district court permitting the drilling of the well which had been commenced prior to the filing of the suit, and this well was completed by defendant Thompson & Black, Inc., as a producing oil well. Upon demand of the Superintendent for the Five Civilized Tribes, defendant Thompson & Black, Inc., assignee of the lease, was required to drill other wells as offset wells, which are producing oil wells. The evidence shows that defendant Thompson & Black, Inc., was required to drill three wells upon the lease by the Superintendent, and was further required to pay to the Superintendent for the Five Civilized Tribes the sum of $2,075 as offset gas rentals.

Defendant Thompson & Black, Inc., purchased the lease with knowledge of the action pending in the district court of Tulsa county, Okl., for the cancellation of the very lease it acquired. Thus its...