Witbeck v. Hardeman

51 F.2d 450, 1931 U.S. App. LEXIS 2922
CourtCourt of Appeals for the Fifth Circuit
DecidedJuly 17, 1931
DocketNo. 5258
StatusPublished
Cited by8 cases

This text of 51 F.2d 450 (Witbeck v. Hardeman) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Witbeck v. Hardeman, 51 F.2d 450, 1931 U.S. App. LEXIS 2922 (5th Cir. 1931).

Opinions

SIBLEY, Circuit Judge.

Witbeek and Hardeman each desired to prospect for gas and oil under section 13 of the Leasing Act of February 25, 1920, 30 USCA § 221, upon a certain quarter section of land in Louisiana belonging to the United States; both being qualified under the act to do so. Witbeek made oath to his application for a permit on November 9, 1923, and mailed it with the required fees. It was marked “Received” at the land office at 3:30 p. m., November 12, 1923. Harde-man went on the land on Sunday, November 11, 1923, and made a monument and posted a notice thereon, as mentioned in section 221, to obtain a preferential right to a permit for thirty days, and on December 11, 1923, his unsworn application for a permit was received by mail at the land office, but without the fees which were required by the regulations of the Department. A contest between the two applications was had in the Land Department upon issues of law and fact, with appeals and rehearings, resulting finally in a revision of the matter by the Secretary of the Interior, who awarded the permit to .Wit-beek. Before the permit issued, Hardeman brought his bill in the Supreme Court of the District of Columbia against the Secretary and Witbeek, seeking to enjoin the issuance of the permit to Witbeek, and to judicially establish his own prior right thereto. Witbeek was not served, and the bill was dismissed “for want of jurisdiction.” Afterwards, on May 6, 1925, Witbeek got his permit, and gave the bond required of him. Hardeman brought the present bill in equity against Witbeek alone, asserting that he, and not Witbeek, was entitled to the permit, and that Witbeek had been awarded it in consequence o£ an error of law on the part of the Secretary of the Interior, and praying a decree that he is the equitable owner of the permit, and that Witbeek is only a trustee for him, and that Witbeek assign the permit to Hardeman. Witbeek moved to dismiss the bill for want of equity, and also because it concerns property the title to which is still in the United States, and because the United States are an indispensable party and cannot be brought in without their consent. The first motion was overruled, and the second and third reserved for consideration on the merits. After trial, they were impliedly overruled, for a decree was granted Hardeman in all respects as prayed for. Witbeek appeals. The permit has been kept in life by an extension pending the litigation.

Witbeck's first assignments of error are upon the overruling of his motions to dismiss. It is first contended that the bill lacks equity because the grant of a permit to anyone is discretionary, so that no one can complain at not getting it. The language of the statute, 30 USCA § 221, is: “The Secretary of the Interior is authorized, under such necessary and proper rules and regulations as he may prescribe, to grant to any applicant qualified * ® * a prospecting permit.” Regulation 2, 47 Land Decisions 437, declares : “It should be understood that under the Act the granting of a prospecting permit for oil and gas is discretionary with the Secretary of the Interior, and any application may be granted or denied either in part or entirely as the facts may be deemed to warrant.” If the grant be wholly discretionary, the preferring of a competitor cannot be .complained of, because the complainant ean show no certain right in himself had the competitor been refused, notwithstanding the Secretary may have given bad reasons for his aetion. Anicker v. Gunsburg, 246 U. S. 110, 38 S. Ct. 228, 62 L. Ed. 603. But we think the language of section 221 in reference to the applicant who goes upon the land and erects the monument and posts the required notice that “he shall, during the period of thirty days following such marking and posting, be entitled to a preference right over others to a permit for the land so identified,” cannot be so easily nullified. Regulation 5 recognizes this preference, and declares that priority in initiating the claims shall govern in ease of conflict. The Secretary has discretion to deeide whether particular land shall be withdrawn from exploitation, and may refuse all applications for permits to explore it. United States ex rel. McLennan v. Wilbur, Secretary, 283 U. S. 414, 51 S. Ct. 502, 75 L. Ed. 1148. But having decided [452]*452that the land shall be exploited, he must recognize the statutory preference in issuing the permit, there being no discretion to ignore this plain mandate of the law. Daniels v. Wagner, 237 U. S. 547, 35 S. Ct. 740, 59 L. Ed. 1102, L. R. A. 1916A, 1116, Ann. Cas. 1917A, 40.

It is next urged that Witbeek has nothing that he can assign, but has only a contract with respect to land belonging to the United States which cannot be remodeled by a court, even if it ought to be, without the presence of the United States as a party. The bill is framed after the likeness of those often entertained in reference to patents under the land laws prior to the Leasing Act here involved. Daniels v. Wagner, supra, is an example. In that ease the question of the indispensability of the United States as a party was raised, but at page 567 of 237 U. S., 35 S. Ct. 740, was dismissed as too obviously without merit to deserve discussion. The reason is that in such cases the courts refuse to interfere until the Land Department has done its work and issued a final patent, thus ending the proprietary interest of the United States in the land and making the contest over it a matter of private interest only. Johnson v. Towsley, 13 Wall. 72, 20 L. Ed. 485; Marquez v. Frisbie, 101 U. S. 473, 25 L. Ed. 800; Cosmos Exploration Co. v. Gray Eagle Oil Co., 190 U. S. 301, 23 S. Ct. 692, 47 L. Ed. 1064. Under the Leasing Act the land of the United States is not to be conveyed by patent, but leased, so that the proprietary interest of the United States in the land never ceases. Nevertheless, the lease is the final action of the Land Department in disposing of the land, and in this respect is analogous to a patent. The general powers of the Land Department in administering this law are just such as are exercised in administering other land laws, and exactly the same necessities exist for judicial review of frauds on or in the Department, or mistakes of law, or excesses of the limits of authority, as arose in reference to the grant of patents, and similar remedies ought to apply. Furthermore, since a mere permit to' prospect for oil or gas under 30 USCA § 221, is exclusive, and in ease of discovery carries the right to take the oil and gas found at a royalty of 20 per cent, until a lease is applied for, section 224, and to lease for twenty years 160 acres, or one-fourth of the land prospected, at a royalty of 5 per cent., with a preference right to lease the whole land at a royalty to be fixed under Regulations, section 223, the permit may be of as much value and importance as the lease which it controls. The permit is itself an ae.t of the Land Department, final so long as it lasts, and though in its inception a mere license conveying no estate in the land, it is a final grant of a valuable right pursuant to law which ought to be secured to the person to whom the law gives it.

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51 F.2d 450, 1931 U.S. App. LEXIS 2922, Counsel Stack Legal Research, https://law.counselstack.com/opinion/witbeck-v-hardeman-ca5-1931.