Harrell v. Prairie Oil & Gas Co.

8 F.2d 236, 1925 U.S. App. LEXIS 3263
CourtCourt of Appeals for the Eighth Circuit
DecidedSeptember 14, 1925
DocketNo. 6817
StatusPublished
Cited by2 cases

This text of 8 F.2d 236 (Harrell v. Prairie Oil & Gas Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eighth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Harrell v. Prairie Oil & Gas Co., 8 F.2d 236, 1925 U.S. App. LEXIS 3263 (8th Cir. 1925).

Opinion

LEWIS, Circuit Judge.

In July, 1922, appellant, a non compos Cherokee Indian, brought this suit, by her sister and next friend, in the district court of Washington County, Oklahoma, seeHng therein a decree of cancellation of an oil and gas lease given to appellee on June 19, 1916, by her guardian.. The complaint disclosed that thg guardian gave the lease after proceedings had been taken for that purpose in the probate court having charge of the ward’s estate, and that an order of that court was entered on June 19, 1916, confirming the giving of the lease; but it was alleged as ground for the relief sought that at the time the probate proceedings were had appellee then held an oil and gas lease on the 80 acres belonging to the ward which would not expire until three years and nine months thereafter, and that the whole proceeding (in probate) was vague, indefinite, misleading and fraudulent (a) in that it failed to state either in the petition of the guardian to sell the new lease, ' or in the order authorizing its sale, or in the notice of sale, whether the proposed lease -would take effect immediately upon its approval by the court or at the end of the term of the then existing lease; (b) that the purpose of the sale and lease was fraudulent because the existing lease would be a cloud upon the title of any bidder other than appellee, and a léase to anyone else would not become effective until the expiration of the old lease, thus preventing competitive bidding; (e) that the proceedings were fraudulent in that the notice of the proposed giving of a new lease did not state that the lands then had producing wells thereon; (d) they were fraudulent in that the notice faffed to state that the wells on the lands were fully equipped with casing and the value thereof, and that said easing would be sold and become the property of the new lessee; (e) in that the form of notice was the one usually used where oil and gas mining leases are advertised for sale on undrffled and unproductive lands; (f) in that at the time the lease was sold the wells on the land were producing from what is known as the Bartlesville sand and that wells in that vicinity had a fixed market value of not less than $2,500 per barrel per daily production, and (g) because of the foregoing facts there was no competitive bidding and appellee, on its bid of $1,000, thereby obtained an unjust and unlawful advantage over the ward, the said lease being worth not less than $75,000, in addition to the royalties reserved. The 80 acres belonging to the ward was allotted to her under the Act of July 1, 1902. The first lease was given to Renfrow Oil & Gas Company on February 2, 1905, for a term of 15 years from its date, and was assigned to appellee in 1912. The second was given for a term of 5 years from its date, June 19, 1916, and for as much longer thereafter as oil or gas should be found in paying quantities. These facts are disclosed by exhibits attached to the complaint.

The suit was removed to the Federal court. By its answer appellee admitted that it was assignee of the old lease and had been in possession under it, that the ward’s guardian gave to it a new lease on the 80 acres on June 19,1916, after procedure had been tak[237]*237on in probate court for that purpose, as alleged in the complaint, but it denied that those proceedings were fraudulent, unlawful, or misleading or intended so to be in any respect, denied that its bid and purchase price, $1,000, for the lease was inadequate, alleged that all of the facts and circumstances regarding the condition of the 80 acres and sale of the lease were fully disclosed to the probate court, that the court was fully advised as to all of the facts, that the subject-matter thereof was wholly within its jurisdiction, and its order confirming the lease is not subject to collateral attack.

The guardian’s petition to sell the new lease was filed in probate court June 7, 1916. Among other things it stated that the 80-acre tract had been leased for oil and gas on February 2, .1905, to the Renfrew Oil & Gas Company, that said lease ran for a period of fifteen years from February 2, 1905, that it had been assigned and transferred to the Prairie Oil & Gas Company, appellee, and that company was in possession producing oil and gas, that the guardian had received from appellee an offer for a new lease to bo substituted for and taken in lieu of the old lease, such new lease to extend for a period of five years and so long thereafter as oil or gas may be found in paying quantities, that appellee had offered to pay the guardian as a bonus for said new lease the sum of $1,000 and to pay a royalty of one-eighth of the oil to be produced. The petition prayed that the guardian be authorized by order of court to lease the land for oil and gas mining purposes for the term of 5 years and as much longer thereafter as oil or gas is found in paying quantities, and that said lease be sold in accordance with law and with the rules providing therefor. The court entered an order on the petition that the guardian offer for sale an oil and gas mining lease for the term of five years and as much longer thereafter as oil or gas is found in paying quantites on the 80 acres. The order then contains this:

“It is further ordered that the said sale be for a cash bonus of not less than $1,000.00 and a royalty of not less than one-eighth of all the oil produced and saved from the premises or its equivalent in money at the market value thereof * * * that the sale of said lease be held in the court room occupied by this court in open court on the 19th day of June, 1916.”

It was further ordered that notice of the sale be given by posting and by publication, and that such sale should be in all things subject to confirmation, acceptance and approval of the guardian and of the court. The notice was posted and published by the guardian as ordered. It recited that the petition of the guardian for sale of an oil and gas mining lease for a period of five years and as long thereafter as oil or gas is produced in paying quantities on the lands of his ward had been filed in said court. The land was described in the petition and notice by legal subdivisions and by naming the county in which it was situate. The notice further stated that hearing on the petition had been set for June 19,1916, and the court would hear the same at that time. It further recited:

“Notice is further given that said lease will be offered for sale at said time and place, at whieh time all persons interested may appear and submit bids thereon, and that said lease will be sold to the highest and best bidder, subject to the confirmation of said court. The right to reject any and all bids is hereby reserved.”

It was signed by the guardian. Proof of publication and posting of the notice was duly made. On June 19, 1916, the guardian filed with the court his report, stating that on that day he had sold in open court, in accordance with the prior order of the court, an oil and gas lease on the land of his ward, naming her and describing the land, 80 acres, to the Prairie Oil & Gas Company for a cash bonus of $1,000, and in addition thereto a royalty of one-eighth of the oil to be produced and saved from the premises, or its equivalent in money, and the sum of $150 per year for each gas well from which gas would be marketed, for the term of five years and as much longer thereafter as oil or gas is produced in paying quantities. On the same day the court entered an order reciting that the matter came on for hearing on the return and report of the guardian, and it was ordered that the report he approved and the guardian directed to deliver the lease. All of the preceding steps that had

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Bluebook (online)
8 F.2d 236, 1925 U.S. App. LEXIS 3263, Counsel Stack Legal Research, https://law.counselstack.com/opinion/harrell-v-prairie-oil-gas-co-ca8-1925.