HIGHPOINTE ENERGY v. VIERSEN
2021 OK 32
| Okla. | 2021Background
- Dispute over ~90 net mineral acres in McClain County, Oklahoma with two competing title chains: a 1937 trustee's (bankruptcy) sale to successors of Cal‑Cul Oil Co. (the "Viersen" chain) and a 1938 mortgage foreclosure sheriff's sale tracing from The Women's Home Missionary Society (the "Missionary" chain).
- The Missionary's mortgage was recorded in 1923; Cal‑Cul acquired mineral interests in 1927 and was adjudicated bankrupt in 1933; trustee sold Cal‑Cul assets in 1937 and filed the trustee deed in McClain County on Nov. 10, 1937.
- The Missionary commenced foreclosure in 1936, served the bankruptcy trustee with process, obtained decree in April 1938, and a sheriff's deed issued Oct. 7, 1938; trustee did not file bankruptcy records in McClain County nor otherwise participate in the foreclosure.
- The trustee’s sale was not expressly ordered free and clear of liens; the trustee did not take steps to extinguish the Missionary mortgage or seek bankruptcy‑court relief to intervene in the foreclosure.
- Highpointe (claiming through the Missionary chain) sued to quiet title; trial court granted summary judgment holding the foreclosure/sheriff's‑sale chain superior; the Oklahoma Supreme Court affirmed.
Issues
| Issue | Plaintiff's Argument (Highpointe/Missionary) | Defendant's Argument (Viersen/bankruptcy purchasers) | Held |
|---|---|---|---|
| Which chain holds superior title? | Foreclosure/sheriff's‑sale chain is superior because the trustee had notice and failed to clear the mortgage. | Trustee's earlier trustee's‑sale (first in time) is superior as in Viersen v. Boettcher. | Sheriff's‑sale (foreclosure) chain is superior; bankruptcy purchasers obtain no greater rights than trustee, and trustee held title subject to the mortgage. |
| Does service on the trustee or recording of the bankruptcy control validity of the foreclosure as to the trustee? | Service on trustee put the trustee on notice; because trustee failed to act, foreclosure is effective against those claiming under trustee. | Even if served, trustee required bankruptcy‑court action to intervene; under Viersen foreclosure is void as to trustee if trustee lacked notice. | Service mattered here; trustee had notice but did not seek relief or participate, so foreclosure was not void as to trustee. |
| Did the trustee’s sale extinguish the Missionary mortgage (i.e., sell free of liens)? | The trustee did not sell free of liens; sale remained subject to the recorded mortgage, so mortgage could be foreclosed later. | Trustee's earlier sale should prevail over later sheriff sale because it was first in time. | Trustee’s sale was subject to the mortgage; absent an order directing sale free of liens or trustee action to clear it, subsequent foreclosure could extinguish trustee’s interest. |
Key Cases Cited
- Viersen v. Boettcher, 387 P.2d 133 (Okla. 1963) (trustee's sale conveys no better title than the bankrupt had; foreclosure may be void as to trustee when trustee lacked notice)
- Higgs v. Renfrow, 159 P.2d 749 (Okla. 1945) (purchaser from trustee takes no better title than the bankrupt/trustee)
- Galeener v. Reynolds, 69 P.2d 49 (Okla. 1937) (persons acquiring interest with knowledge of pending action are bound by the judgment)
- Hall v. Main, 34 F.2d 528 (E.D. Ill. 1929) (bankruptcy court controls whether trustee may intervene or be restrained in state proceedings)
- Sautbine v. Keller, 423 P.2d 447 (Okla. 1966) (discusses effect of judgments on trustees and parties in interest)