Meeks v. Adams Louisiana Co., 19 S.E.2d 526

Meeks v. Adams Louisiana Co.

19 S.E.2d 526 | Ga. | 1942

Lead Opinion

1. A suit to cancel an oil lease as constituting a cloud upon the title of the petitioner's lands is such a suit as may be removed to the Federal court, where the requisite diversity of citizenship is present and the amount in controversy exceeds $3,000 in value. 28 U.S.C.A. § 41.

2. An averment in a petition for removal that the value of the lands exceeded the jurisdictional amount is insufficient to sustain the jurisdiction of the Federal court, where it appears that the entire value of the lands was not put in controversy by the suit, but that only a mineral lease over the lands was involved. Wetsel v. Empire Gas Fuel Co., 264 Fed. 865.

3. There is no merit in the contention of the plaintiff in error that no value can be placed on the oil lease because she alleged in her petition for cancellation that the lease was void. Whether or not the lease is void as alleged is a matter for determination on the trial of the case; and on a petition for removal of the suit to the Federal court the State court will treat the lease as being valid in determining whether the value of the matter in dispute exceeds $3,000.

4. The jurisdiction of the Federal court depends upon the amount involved in the particular case, without consideration of any contingent loss which may be sustained by either party through the probative effect of the judgment, however certain the occurrence of such loss may be. Elgin v. Marshall, 106 U.S. 578 (1 Sup. Ct. 484, 27 L. ed. 249); New *681 England Mortgage Security Co. v. Gay, 145 U.S. 123 (12 Sup. Ct. 815, 36 L. ed. 646).

5. However, in a petition for removal of a suit to cancel an oil lease, it is proper for the lessees to show that by reason of its location with reference to other leases which they hold the lease in question has a value to them in excess of the jurisdictional amount. King v. Southern Railway Co., 119 Fed. 1016. The petition for removal in the instant case sufficiently alleged that the value of the matter in dispute exceeded the jurisdictional amount by showing that the lease in question had a value to the lessees in excess of $3,000 by reason of its location near the center of a large tract of land under lease to them.

6. The court did not err in overruling the demurrer to the petition for removal, and in ordering the case removed to the Federal court as prayed.

Judgment affirmed. All the Justicesconcur.

No. 14036. MARCH 11, 1942. REHEARING DENIED MARCH 30, 1942.

Addendum

Mrs. Amy Meeks, a resident of Coffee County, Georgia, filed in the superior court of Coffee County a petition seeking to have a certain oil and mineral lease canceled as void and as constituting a cloud on her title to a 359-acre tract of land located in Coffee County. The lease, dated April 14, 1937, purports to convey to the Adams Louisiana Company, a Texas corporation, for a stated period and for stated considerations, the oil and mineral rights to the petitioner's 359-acre-tract, and purports to have been signed by petitioner. She alleged that the lease was void, because it was not executed and delivered by her or by any one authorized so to do by her, and for other reasons. The petition named as defendants the Adams Louisiana Company, the original lessee, and certain other non-resident corporations and individuals that the records of Coffee County disclosed to be assignees of the lease. The petition prayed, for service by publication on the named defendants and the general public, calling upon the named defendants and any other persons claiming an interest in the described lease to appear and set up their claims to the lease; that the lease and its assignments be ordered canceled by decree of the court as void and as constituting a cloud on petitioner's title; that the defendants be required to deliver up the lease and its assignments for the purpose of cancellation; and for general relief. Service of the petition was made by publication in the manner prayed for.

The defendants, in proper time, filed a bond and petition to remove the case to the district court of the United States for the *682 Southern District of Georgia, Waycross Division. They alleged that they and their predecessors in title had been engaged for several years in an intensive effort to locate oil or gas producing areas in southeast Georgia; that they had had extensive scientific tests made by specialists for the purpose of determining what lands in that area were of such structure as to indicate a possibility of locating gas or oil thereunder; that as a result of the recommendation of the experts mineral leases over a large area in Coffee County were procured; that the lands of Mrs. Meeks, the petitioner, are situated approximately at the center of the area leased by the defendants and their predecessors, and constitute a vital part of the entire area under lease; that in order to properly test the gas and oil possibilities of the leased lands it will be necessary to bore at least one and probably several wells to a depth of from 3500 to 4500 feet, at a cost of from $30,000 to $60,000 each; that because of the great expense involved in making such tests oil operators will not sink wells in unproved or "wildcat" territory unless and until the area for several miles around is under lease to such operators; that it is necessary for the oil operators making the test to control the mineral rights over the adjoining area, in order to prevent an unnecessarily expensive drilling contest in case oil is located; that on the faith of the fact that they had a genuine and valid lease on the lands of Mrs. Meeks, the defendants and their predecessors at great expense acquired the mineral rights to five thousand or more acres of land surrounding and in the immediate vicinity of the lands of Mrs. Meeks; that they had been advised to undertake proving the field by sinking a well in the vicinity of the lands of Mrs. Meeks; that if the lease of Mrs. Meeks is canceled, neither they nor other experienced oil operators will wish to or will in all probability sink a well near the lands of Mrs. Meeks; that if they do not sink the well in that area as advised by their experts, the entire investment they have made in securing leases and making investigations will be a total loss to them, causing damage to them in excess of $3000; that if, on the other hand, they should desire to sell their mineral leases over the entire area, the fact that Mrs. Meeks's lease had been canceled would render them unsalable to experienced oil men, and would decrease the value of the leases by more than $3000; that, "by reason of the facts set forth in this petition, your petitioners show that the value of the leasehold interests in controversy *683 in the case sought to be removed is more than $3000, and therefore the amount in controversy in the cause pending in the superior court of Coffee County, Georgia, herein sought to be removed, is more than $3000 exclusive of interest and costs." The petition for removal also alleged that under the petition of Mrs. Meeks the mineral lease constitutes a cloud on the title to her lands, that therefore the title to the lands of Mrs. Meeks is involved, and that the value of these lands is in excess of $3000.

Mrs. Meeks demurred to the petition for removal, on the following grounds, among others: (1) that the Federal court does not have jurisdiction over the subject-matter in controversy, in that the relief sought is only available from the State court; (2) that since she alleged in her petition that the lease was totally void, it could not have a value of $3000 or any other sum that would give the Federal court jurisdiction of the suit; and (3) that it is not definitely and unqualifiedly alleged in defendants' petition for removal that the value of the alleged leasehold in controversy, separably considered, was $3000 either at the time of the filing of plaintiff's petition in the State court or at the time of the filing of the petition for removal. The judge overruled the demurrer, approved the defendants' removal bond, and granted the removal as prayed. The petitioner excepted, assigning error on each of these rulings.

ON MOTION FOR REHEARING. The motion for a rehearing asserts that syllabus 3 of the opinion overlooks paragraph 4 of the lease involved, which was attached as an exhibit to the plaintiff's petition, which contains the following provision: "If operations for drilling are not commenced on said lands on or before 24 months from this date, the lease shall then terminate as to both parties, unless, on or before the expiration of the said 24 months, lessee shall pay or tender to lessor or to the credit of lessor . . the sum of five cents per acre for the number of acres then covered by this lease and not surrendered as hereinafter provided, which shall cover the privilege of deferring commencement of drilling operations for a period of 12 months," the lease providing further that for five cents per acre the commencement of drilling may be further deferred for *684 successive periods of 12 months each during the primary term. It is insisted that these provisions show that the lease has terminated, and that the burden is upon the lessee to show that the conditions stated have been met. This argument overlooks section 2 of the lease, which provides: "Subject to the other provisions herein contained, this lease shall be for a term of ten years from this date (called primary term), and so long thereafter as oil, gas, and other minerals are produced from said lands hereunder." It is obvious that the lease is for a term of ten years and as long as oil, gas, and other minerals are produced from the land, and the requirements of drilling and payment of rentals are conditions subsequent; and the burden is upon the lessor to show that these conditions have not been satisfied.

The motion for rehearing further assails the ruling made in syllabus 5 of the opinion, and contends that the case there cited does not support the ruling made. The test as to the amount in controversy in a case of this type, where the plaintiff's petition shows no value, is the value of that which the defendant will lose if the plaintiff prevails; and the decision cited supports this ruling, which is also supported by the following cases: Smith v. Adams, 130 U.S. 167 (9 Sup. Ct. 566,32 L. ed. 895); Elliott v. Empire Natural Gas Co., 4 F.2d 493; Cowellv. City Water Supply Co., 121 Fed. 53.