Walker v. Felmont Oil Corporation

Decision Date16 December 1955
Docket NumberCiv. No. 600.
Citation136 F. Supp. 584
PartiesHenry B. WALKER, Jr., Trustee, et al., Plaintiffs, v. FELMONT OIL CORPORATION et al., Defendants.
CourtU.S. District Court — Western District of Kentucky

COPYRIGHT MATERIAL OMITTED

Walker & Walker, Evansville, Ind., Clarence Bartlett, Owensboro, Ky., for plaintiffs.

Byron, Sandidge & Holbrook, Owensboro, Ky., Walter Davison, Tulsa, Okl., Fred W. File, Mattoon, Ill., L. Allen Rhoads, Henderson County Atty., Henderson, Ky., for defendants Carter Oil and Felmont Oil Companies.

King & Craig, Henderson, Ky., for Olen D. Sharp.

M. B. Holifield, Asst. Atty. Gen., for Kentucky State Property & Buildings Commission and Commonwealth of Kentucky.

Funk, Chancellor & Marshall, Frankfort, Ky., for Ohio River Oil Co.

BROOKS, District Judge.

This declaratory judgment action involves the authority to execute oil and gas leases for that portion of the bed of the Ohio River that lies north of the thread of the stream. There are three groups of parties holding conflicting leases, each claiming the exclusive right to extract oil and gas from the river bed.

Plaintiffs Henry B. Walker, Jr., as successor trustee, et al., and their lessees claim the oil and gas rights by virtue of certain land patents purporting to convey title to portions of the river bed. These parties are hereinafter referred to as the Patentees.

The defendants, Henderson County, Kentucky, and its lessees, base their claim on leases from Henderson County, Kentucky. They are referred to herein as Henderson County.

Defendants, Commonwealth of Kentucky, its lessee, Ohio River Oil Company, Inc., and its assignee, Olen D. Sharp, base their claim on a lease from the State Property and Buildings Commission of the Commonwealth of Kentucky. This group of litigants is referred to herein as the Commonwealth.

As a result of a pretrial conference, certain matters were reserved for later adjudication and the case submitted on the following three issues of law:

1. Is that part of the bed of the Ohio River lying between the thread of the stream and the northern low water line capable of appropriation under the patent procedure as outlined in KRS 56.190 to 56.320?

2. Does Henderson County, Kentucky, a county adjacent to the Ohio River, have authority under KRS 56.190 to 56.320 to lease the oil and gas lying beneath that part of the bed of the Ohio River which is between the thread of the stream and the northern low water line thereof?

3. Does the State Property and Buildings Commission of the Commonwealth of Kentucky have authority under KRS 56.450 to KRS 56.550 inclusive to grant a valid lease disposing of the oil and gas under that portion of the bed of the Ohio River lying between the thread of the stream and the northern low water line thereof?

It is well established that the Ohio River is within the territorial confines of Kentucky and that the northern boundary of Kentucky is the low-water mark on the north bank of the river. Handly's Lessee v. Anthony, 1820, 5 Wheat. 374, 5 L.Ed. 113; Louisville Bridge Co. v. City of Louisville, 1883, 81 Ky. 189; State of Indiana v. State of Kentucky, 1890, 136 U.S. 479, 10 S.Ct. 1051, 34 L.Ed. 329.

The law is also well settled that the title to the southern half of the river bed from the middle of the river to the Kentucky shore is vested in the riparian land owners in Kentucky, and title to the bed of the Ohio River from the thread of the stream to the low-water mark on the northern shore is in the Commonwealth of Kentucky. Handly's Lessee v. Anthony; Louisville Bridge Co. v. City of Louisville; State of Indiana v. State of Kentucky, all supra; Berry v. Snyder, 1867, 66 Ky. 266; Ware v. Hager, 1907, 126 Ky. 324, 103 S.W. 283; Bedford-Nugent Co. v. Herndon, 1922, 196 Ky. 477, 244 S.W. 908; Willis v. Boyd, 1928, 224 Ky. 732, 7 S.W.2d 216; City of Covington v. State Tax Commission, 1929, 231 Ky. 606, 21 S.W.2d 1010; Louisville Sand & Gravel Co. v. Ralston, Ky.1954, 266 S.W.2d 119.

All parties to this action concede the sovereign power of Kentucky to permit the development of oil and gas deposits in the northern half of the bed of the Ohio. They differ sharply on the interpretation and construction of the various legislative acts that are advanced as authority for their development.

I

In their complaint the Patentees allege complete compliance with the laws of Kentucky providing for the appropriation of vacant and unappropriated lands and assert the validity of certain patents issued in 1938 to portions of the Ohio River bed north of the thread of the stream. These patents, signed by the Governor and Secretary of State and bearing the Seal of the Commonwealth of Kentucky, are filed with the record. The attack on the validity of these patents centers on the contention that the patent statutes as construed by the Court of Appeals of Kentucky apply only to uplands and do not permit the acquisition of the northern half of the bed of the Ohio River by patent proceedings.

The question of whether or not the northern bed of the Ohio River is subject to patent was directly considered by the Court of Appeals of Kentucky in 1907 in the case of Ware v. Hager, 126 Ky. 324, 103 S.W. 283. Chapter 136 of the Acts of 1893 of the Kentucky Legislature, being Sections 4702-4705 of the Kentucky Statutes, Carroll's First Edition, 1903, was the law then in effect dealing with vacant and unappropriated land. The court construed this Act of 1893 as not authorizing the acquisition of the northern bed of the river by patent. In so holding the court said:

"While the state owns the land to the northern shore of the river, we do not think it has ever provided for the taking up of the river bed between the thread of the stream and the northern shore as vacant land. The proceeding in question was instituted under chapter 127, Ky.St.1903. Section 4702, which is the first section of that chapter, provides that each county in the state shall have the right to dispose of the unappropriated lands lying therein not otherwise provided for in the manner thereinafter directed. Section 4703 provides that an actual settler on any vacant or unappropriated land shall have a pre-emption right to any number of acres, not exceeding 100. It also provides that any person who wishes to appropriate any vacant or unappropriated land may obtain an order of court authorizing him to enter and survey any number of acres, not more than 200. Section 4704 provides that the surveyor shall survey the entries in the order of time in which they are made, bounding the same by plainly marked trees, stones, or stakes, and noting where they bind on a water course or a marked line of another survey. In enacting these provisions, we cannot believe that the Legislature had in mind the taking up of the bed of the Ohio river between the thread of the stream and the northern shore. Such a survey could not be marked by stones or stakes or plainly marked trees. There could be no actual settlers on such land. While we do not doubt the power of the Legislature to provide for the issuing of patents for the bed of the Ohio river north of the thread of the stream, so that the sand or minerals which may be on or under this land may be appropriated, we do not think it has yet done so".

This opinion has not been overruled or modified, but in 1926 the patent statutes interpreted by it were amended. However, the 1926 Amendment did not disturb Sections 4703 and 4704 which were the basis of the court's decision. Section 4703 providing that an actual settler on vacant and unappropriated land shall have a pre-emption right to 100 acres and that any person may enter and survey up to 200 acres of vacant land was re-enacted. Section 4704 providing the survey shall be marked "by plainly marked trees, stones or stakes, noting where it binds on a watercourse, or the marked line of another survey, giving names", was also re-enacted. The reenactment by a legislature of a statute interpreted by the highest court of the State constitutes an adoption of the statute as construed. Chatterson v. City of Louisville, 145 Ky. 485, 140 S.W. 647; Rose v. Turner, 301 Ky. 272, 191 S.W.2d 397; Button v. Hikes, 296 Ky. 163, 176 S.W.2d 112, 150 A.L.R. 779.

The Patentees advance the further argument that Section I, Sec. 4702, of the 1926 Amendment repudiates the Ware case by declaring for the first time that the bed of the river north of the thread of the stream was "vacant and unappropriated property", and that because of this declaration this property became subject to patent. This argument has also been answered. In Willis v. Boyd, 1928, 224 Ky. 732, 7 S.W.2d 216, 218, a case involving a sand and gravel lease of the north bed of the Ohio River, the 1926 Amendment was considered, and the court stated:

"Assuming the act to be valid, it will be observed that section 4702 does not give the counties unlimited disposition of vacant lands. But such right is to be exercised `in the manner hereinafter directed,' and while the mainland may be patented and sold in `the manner provided' therefor and made applicable thereto, the power of the disposition of the river bed was restricted to the letting or leasing for county purposes upon such terms and conditions as to it may appear beneficial to said county."

Also see Board of Councilmen of City of Frankfort v. Pattie, 227 Ky. 343, 12 S.W. 2d 1108.

The Patentees also contend that every grant or patent of land is presumed to be valid and to have issued regularly and is prima facie evidence of title. For their authority they rely on Wallace v. Maxwell, 24 Ky. 447, and Poplar Mountain Coal Co. v. Dick, 7 Ky.Op. 420. But a study of those cases discloses that the presumption that exists is only that the officers charged with issuing a patent properly perform their duties. As stated in Wallace v. Maxwell, supra, "It is admitted that the legal presumption is, that the surveyor, register, Governor and Secretary of State, have done their duty,...

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4 cases
  • Walker v. Felmont Oil Corporation
    • United States
    • U.S. Court of Appeals — Sixth Circuit
    • 12 Febrero 1957
    ...County. The appeals have been heard together by this court. The Memorandum of the District Judge, which is reported at Walker v. Felmont Oil Corp., D.C., 136 F.Supp. 584, contains a clear statement and analysis of the conflicting claims, together with the reasoning of the District Judge and......
  • Com. v. Henderson County
    • United States
    • United States State Supreme Court — District of Kentucky
    • 22 Marzo 1963
    ...Statutes involved in a way directly opposite to the State Court construction in the presently appealed, later judgment. Walker v. Felmont, 136 F.Supp. 584 (W.D.Ky., 1955). The United States District Court judgment was reversed by the United States Court of Appeals for the Sixth Circuit, not......
  • Walker v. Brooks
    • United States
    • U.S. Court of Appeals — Sixth Circuit
    • 28 Enero 1958
    ...that lie north of the thread of the stream opposite the Kentucky shore. The District Judge in an opinion reported at Walker v. Felmont Oil Corporation, 136 F.Supp. 584, ruled against the petitioners herein and also against the claim of Henderson County, Kentucky, and in favor of the State P......
  • BUHLER BROTHERS, INC. v. Alabama Grain Elevator Co.
    • United States
    • U.S. District Court — Southern District of Alabama
    • 19 Diciembre 1955
    ...136 F. Supp. 582 ... BUHLER BROTHERS, Inc., a corporation, Plaintiff, ... ALABAMA GRAIN ELEVATOR COMPANY, Inc., a corporation, A. W. Todd, as Interim ... ...

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