Estate of Fairbank ex rel. Fairbank v. United States

164 Ct. Cl. 1, 1964 U.S. Ct. Cl. LEXIS 194, 1964 WL 8594
CourtUnited States Court of Claims
DecidedJanuary 24, 1964
DocketCong. No. 10-56
StatusPublished
Cited by13 cases

This text of 164 Ct. Cl. 1 (Estate of Fairbank ex rel. Fairbank v. United States) is published on Counsel Stack Legal Research, covering United States Court of Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Estate of Fairbank ex rel. Fairbank v. United States, 164 Ct. Cl. 1, 1964 U.S. Ct. Cl. LEXIS 194, 1964 WL 8594 (cc 1964).

Opinion

Davis, Judge,

delivered tbe opinion of the court:

Through this Congressional reference1 we are asked to pass upon still another phase in a continuing dispute over a famous tract of land — Section 36, Township 30 South, Range 23 East, in the Elk Hills of Southern California — a dispute which has remained alive for three generations. As before, the controversy centers on the issue of whether Section 36, which is now concededly oil-bearing, was known to be mineral land in January 1903.

The problem arose because Congress, in the Act of March 3, 1853, 10 Stat. 244, 246, granted to the then new State of California, out of the public lands, Sections 16 and 36 for school purposes — with certain exceptions, among which were “mineral lands.” Minkig Co. v. Consolidated Mining Co., 102 U.S. 167 (1880). The Act made no provision for determining what part of these sections, if any, was to be excluded from the grant on the basis of minerality; there was no provision for the issuance of patents or for any comparable action by the Interior Department to evidence the transfer of title to the State. If the land was not excluded, title would automatically pass upon the Department’s approval of the survey of the area. United States v. Wyoming, 331 U.S. 440, 443-44 (1947); West v. Standard Oil Co., 278 U.S. 200, 208-09 (1929); Wyoming v. United States, 255 U.S. 489, 500-01 (1921).

Although the surface of the statute excludes all “mineral lands,” the Supreme Court has construed it, along with comparable legislation, as barring only those lands known to be mineral at the time of the survey (or when title otherwise passes), and not lands thereafter discovered or adjudged to be mineral.2 It is also settled that oil and gas are “mineral” [4]*4within the meaning of such Congressional legislation excepting mineral lands from federal grants. Burke v. Southern Pacific R.R., 234 U.S. 669, 676-79 (1914).

The area of Township 30, including Section 36, was surveyed by the Federal Government in 1901, and the Interior Department approved the survey on January 26,1903. The surveyor returned all of the lands covered by his survey, including Section 36, as mineral . This designation was not binding; it was more in the nature of a warning to prospective purchasers from the State that, in the eyes of the Federal Government, California had not acquired title to the land under the 1853 Act. Initially acquiescing in the surveyor’s return, California applied, early in 1903, for lieu land to replace Section 36, but in 1905 the State — apparently changing its mind as to the character of Section 36 — sought to substitute other base lands for the lieu land it had selected. In 1909, California sold Section 36. In the same year, one of the purchasers in turn conveyed his part of the land to Carman and Fairbanb. It is the latter’s estate which is the plaintiff here.

Meanwhile, the Federal Government was developing its own position on Section 36 and the nearby lands. For some time before the approval of the survey, lands in that region (Kern County, California) had been suspended from disposition as agricultural land “until further orders,” because of a petition (known as the “Miners’ Petition of 1899”) claiming that much of the area was mineral. Late in 1903 (after the approval of the survey returning Section 36 as mineral) the General Land Office directed an agent (Ryan) to examine the lands covered by this withdrawal. As a result of his recommendations, Section 36 (among others) was relieved from suspension in April 1904. In 1908, after some further study by the Geological Survey, lands including Section 36 were again temporarily withdrawn, pending a more definite classification. In 1909, the Geological Survey concluded that much of the land, including all of Township 30 (thus covering Section 36), was oil land. The Interior Department then withdrew the township (and other areas) from all forms of disposition. President Taft approved this withdrawal in 1910, placing the land in a petroleum reserve. [5]*5By an Executive Order of September 2,1912, the President put the township in Naval Petroleum Reserve No. 1, “for the exclusive use or benefit of the United States Navy.”3

In January 1914 the General Land Office directed the institution of administrative proceedings against California (and its transferees) to consider whether Section 36, among other lands, was known to be mineral on January 26, 1903 (the date of the approval of the survey). These proceedings limped along until June 1921 when Secretary Fall dismissed them without deciding the issue of minerality. In February 1924, Congress, spurred by the oil controversies of the early 1920’s (see footnote 3, supra), directed the Secretary to begin proceedings to establish the Government’s title to Section 36. 43 Stat. 15 (1924). Administrative proceedings were again commenced in May 1925. The Standard Oil Company of California, which claimed ownership of parts of the section and leased other parts (including the portion now claimed by plaintiff),4 sought to enjoin these renewed proceedings on the theory that Secretary Fall’s action in 1921 had terminated all control by the Interior Department over the land. The Supreme Court held otherwise in 1929 (West v. Standard Oil Co., 278 U.S. 200) and the administrative proceedings were then resumed. Ultimately, in January 1935, Secretary Ickes, reversing decisions of the Register who had presided at the hearings and of the Commissioner of the General Land Office, ruled that Section 36 was known to be mineral on January 26,1903.

The United States then brought suit against plaintiffs’ predecessor (and others) to quiet the Government’s title to the Section. Rejecting a plea by the defendants for a de novo trial on the facts, the Southern District of California held that the administrative determination was binding since it was supported by substantial evidence and in accord with the law. United States v. Standard Oil Co., 20 F. Supp. 427 (1937), 21 F. Supp. 645 (1937). This judgment was affirmed, in a divided vote, by the Court of Appeals for the [6]*6Ninth Circuit. 107 F. 2d 402 (1939). The Supreme Court denied certiorari on January 29, 1940, 309 U.S. 654.

Some twenty years earlier, litigation involving nearby sections in the Elk Hills had come to a similar conclusion. The United States sued to cancel a patent issued to the Southern Pacific, in December 1904, for lands in Township 30, including two sections immediately adjoining Section 36 {i.e., Sections 25 and 35); the ground of the action was that the company had fraudulently misrepresented that the lands were non-mineral.5 After a judicial trial, the District Court held for the Government and ordered cancellation of the patent. The Court of Appeals reversed, but in 1919 the Supreme Court reinstated the District Court’s decision. United States v. Southern Pacific Co.,

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164 Ct. Cl. 1, 1964 U.S. Ct. Cl. LEXIS 194, 1964 WL 8594, Counsel Stack Legal Research, https://law.counselstack.com/opinion/estate-of-fairbank-ex-rel-fairbank-v-united-states-cc-1964.