Ohio Oil Co. v. Thompson

120 F.2d 831, 1941 U.S. App. LEXIS 4630
CourtCourt of Appeals for the Eighth Circuit
DecidedJune 23, 1941
Docket11915-11917
StatusPublished
Cited by22 cases

This text of 120 F.2d 831 (Ohio Oil Co. v. Thompson) 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
Ohio Oil Co. v. Thompson, 120 F.2d 831, 1941 U.S. App. LEXIS 4630 (8th Cir. 1941).

Opinion

THOMAS, Circuit Judge.

This appeal arises out of proceedings in the district court subsequent to the decision of the Supreme Court in Thompson, Trustee, v. Magnolia Petroleum Co. et al., 309 U.S. 478, 60 S.Ct. 628, 84 L.Ed. 876. In that case the Supreme Court reversed the decision of this court in Magnolia Petroleum Co. v. Thompson, 8 Cir., 106 F.2d 217. The former appeal to this court was from an interlocutor decree in bankruptcy entered by the district court for the eastern district of Missouri. The issues arose in that court in summary proceedings under § 77 of the Bankruptcy Act, 11 U.S.C.A. § *833 205, for the reorganization of the Missouri-Illinois Railroad Company, Debtor, a subsidiary of the Missouri Pacific Railroad Company in reorganization in the same proceeding. The trustee petitioned the court to determine title to certain of its right of way land traversing an oil field in Illinois under which the oil was claimed by the oil companies, and for advice and directions pending the determination of title.

The trustee in his petition alleged that a fee-simple title to the right of way land vested in his predecessor under deeds from the former owners and by adverse possession, and that unless he was permitted to enter into a contract for drilling wells on the right of way, extracting the oil and gas and marketing it, the oil and gas would be drawn off through wells drilled on the adjacent lands pending the determination of title. The oil companies claimed that the deeds relied upon by the trustee conveyed only railroad right of way easements and that the fee remained in the grantors under whom the oil companies claimed by virtue of oil leases. They denied the summary jurisdiction of the court to hear and determine the controversy.

The court in an interlocutory order entered November 14, 1938, found that the trustee was in actual possession of the property under a claim of fee-simple ownership and that the court accordingly had summary jurisdiction to determine title.

The court also found that immediate action was necessary to conserve the oil and gas for the benefit of the parties in interest as their rights and title might thereafter be determined.

The interlocutory order enjoined all parties from asserting any adverse claim to the property or to the oil or gas underlying the premises “other than in these proceedings”. The trustee was authorized to drill wells, to remove the oil and gas, to sell the same, and after deducting the expenses to impound the remainder of the proceeds for the account of the adverse claimants as their rights might afterwards be determined.

The summary jurisdiction of the court depended upon whether the trustee was in the actual or constructive possession of the property, title to which was in dispute. Upon appeal to this court by the oil companies counsel for the parties agreed “that if the deeds grant and convey a railroad right of way easement only, such possession [of the trustee] did not extend either actually or constructively to the oil and gas underlying the right of way.” 106 F.2d 222. With this understanding this court undertook to construe the language of the deeds. We held that the deeds conveyed a railroad right of way easement only and not a fee-simple title; that the grantee in possession under a deed cannot claim adversely a larger estate in the land granted than is described in his deed; and that the trustee having neither actual nor constructive possession of the fee, the court was without power to determine ownership in a summary proceeding in bankruptcy. We accordingly reversed the interlocutory order with directions to dismiss the trustee’s petition for want of jurisdiction.

Upon appeal to the Supreme Court the decision of this court was reversed and the order of the district court was affirmed with a single modification hereinafter noted.

The mandate of the Supreme Court, under date of April 24, 1940, addressed to the “Judges of the District Court of the United States for the Eastern District of Missouri”, provided:

“It is now here ordered, adjudged and decreed by this Court that the decree of the said United States Circuit Court of Appeals in this cause be, and the same is hereby, reversed with costs, and that the decree of the District Court, in this cause, be, and the same is hereby, affirmed except insofar as it provides for adjudication of the disputed oumership in the bankruptcy court.
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“And it is further ordered, That this cause be, and the same is hereby remanded to the District Court of the United States for the Eastern District of Missouri with instructions to modify its order so as to provide appropriate submission of the question of fee simple ownership of the right of way to the Illinois State Courts.
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“You, therefore, are hereby commanded that such execution and further proceedings be had in said cause, in conformity with the opinion and decree of this Court, as according to right and justice, and the laws of the United States ought to be had, * * *.” (Italics supplied.)
For the purpose of executing the mandate, the district court, on May 24, 1940, entered an order continuing in force its *834 previous interlocutory orders and providing that the
“Trustee shall proceed in appropriate action or actions in the State Courts of Illinois to determine the question of fee-simple ownership of the strip of land on which the right of way of Missouri-Illinois Railroad is situated * * * in * * * Marion County, Illinois.
“Nothing containéd in the aforesaid interlocutory decree of November 14, 1938, shall prevent the assertion in such proceedings of adverse claims to title in the State Courts of Illinois by any proper party in interest.
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“This court reserves jurisdiction to amplify or modify this order as may hereafter be deemed proper, and reserves jurisdiction to enter final order after final decisions have been obtained in the litigation herein directed to be instituted in the State Courts of Illinois.”

Pursuant to the directions of the court the trustee instituted two suits in the Circuit Court of Marion County, Illinois, to quiet title to the fee-simple title to the strip of land in dispute. The oil companies filed answers and counterclaims. In the counterclaims the oil companies prayed (1) for a permanent injunction restraining the trustee from drilling for oil and gas on the land title to which was in dispute; (2) for an accounting for the oil and gas produced from the premises and marketed and sold by the trustee pursuant to the interlocutory order of the court, and (3) for damages for trespass upon the premises.

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Bluebook (online)
120 F.2d 831, 1941 U.S. App. LEXIS 4630, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ohio-oil-co-v-thompson-ca8-1941.