217 F. 650 | S.D. Cal. | 1914
This is a bill in equity, brought by plaintiff for the purpose of quieting its title to the S. W. % of section 32, township 12 N., range 23 W. S. B. M., situated in Kern county The land is oil-producing land, and is averred in the bill to1 he of a value exceeding $10,000,000. The present motion is for the appointment of a receiver. Upon the hearing of the motion something over 40 affidavits were submitted, together with nearly 700 pages of typewritten testimony, which was taken in support of and in opposition to the application for a patent to this land, made on behalf of- the defendant Pacific Midway Oil Company. An extended review of all of this testimony is impossible within the limits of this decision. I must content myself with a brief statement of some of the salient facts, though the omission herefrom of any fact appearing in the evidence does not mean that such fact was not considered.
In January, 1900, G. W. McCutchen, R. L McCutchen, Lena Mc-Cutchen (his wife), W. C. McCutchen, J. B. McCutchen, M. P. Mc-Cutchen (his wife), C. W. Johnson, and M. A. Johnson (his wife), known in the record as the McCutchen family, filed a mineral location notice upon this land, and recorded the same in the office of the recorder of Kern county. G. W. McCutchen, R. L. McCutchen, J. B. McCutchen, and W. C. McCutchen are brothers, known in the record as the McCutchen Bros., and M. A. Johnson is their sister. The location thus filed is known as the Lone Star location. Before the making of this location G. W. McCutchen, R. L. McCutchen, and C. W. Johnson, their brother-in-law, went upon the ground, surveyed
By deed dated December 5, 1908, the locators of the Cormorant quitclaimed to the McCutchen Bros.; but before that, in November of that year, the latter had already begun the erection of a standard drilling rig upon the land, which rig they afterwards completed at an expense of about $2,000. Though this deed is dated December 5, 1908, the last acknowledgment thereon is dated February 2, 1909, on which day also it was recorded. In January, 1909, and before receiving this deed, the McCutchen Bros., through G. W. McCutchen, entered into negotiations with one C. W.. Smith, looking to the making of an agreement by which Smith was to develop the land, and, if oil were discovered, he was to apply for a patent therefor, upon the receipt of which he should convey the north half thereof to the Mc-Cutchen Bros, and retain the south half for himself. In the development work he was to have the use of the rig which the McCutchen Bros, had placed on the land. These negotiations resulted in the making of an agreement on February 26, 1909, with the Obispo Oil Company, which had been organized through the efforts of Smith and others for the purpose of developing this land upon the conditions stated above. These negotiations also had another result. One of the, McCutchen Bros, was absent, and it was not possible to secure his signature to any agreement. The Cormorant locators' had conveyed to the four McCutchen Bros., and while their deed correctly described the land their location notices did not. The absence of one of the parties, and a misdescription of the land prevented any immediate action under the Cormorant location.
G. W. McCutchen, who was negotiating with Smith, then procured another location to be made upon this land, which is known as the Hawk location. This location contained the names of himself and his sister, M. A. Johnson, two of the original Lone Star locators, together with the names of six others, who permitted G. W. McCutchen to use their names for the purpose of locating the land, but who never claimed any interest therein. The location was made February . 12, 1909, and on February 13th a quitclaim deed from all the other locators to G. W. McCutchen was executed and recorded. The agree¡ment with the Obispo Oil Company of February 26th, mentioned ¡above,, was, made by G. W. McCutchen, who then held whatever title ■ was secured by the Hawk locators, and who on the same day by quit
The Obispo people were not able to make any arrangements until January 19, 1910, on which date the company entered into an agreement with one F. W. Nightingill (subject to the Obispo Company’s contract with G. W. McCutchen) by which Nightingill agreed to pay the company $6,000 and take upon himself the fulfillment of the Obispo contract with McCutchen, and upon the discovery of oil, and the securing of a patent by him, he was to convey to McCutchen the north half of the land, and to the Obispo Company the southeast quarter thereof, retaining the southwest quarter for himself. Pursuant to this agreement the Obispo Oil Company on January 26, 1910, by quitclaim deed, conveyed the land to said F. W. Nighingill, and on February 7, 1910, the latter by similar deed conveyed it to defendant Pacific Midway Oil Company. This company, using the rig and machinery placed on the land by the McCutchen Bros, in December, 1908, and beginning operations in February, 1910, prosecuted the work of development uninterruptedly until June 6, 1910, at which time oil was discovered in paying quantity upon the southwest quarter of the land. Up to the time of the discovery of oil the defendant Pacific Midway Company had expended about $24,000. After discovery, and on June 27, 1910, another location,, known as the Mudhen location, was made of the land in the name of five of the original locators of the Lone Star and three other McCutchens. Those of the original Lone Star locators whose names were not used in the Mud-hen location, were Geo. McCutchen, C. W. Johnson, and Mrs. M. A. Johnson. The other locators of the Mudhen all conveyed to G. W. McCutchen by deed dated July 12, 1910. On July 2, 1910, the land was again withdrawn under the act of June 25, 1910.
In the winter of 1910, the Obispo Oil Company began operations upon the southeast quarter of the land, to which it was entitled to a reconveyance from the Pacific Midway Company under its contract with Nightingill, which the Pacific Midway Company had agreed to carry out. It sank three wells upon this quarter, one of which proved very productive. G. W. McCutchen, it will be remembered, was entitled to a reconveyance from the Pacific Midway Company of the north half of the tract, containing 80 acres. In September, 1910, he
Pacific Midway Company, S. W. %............................being 40 acres
Obispo Company, S. E. j4.................................... “ 40 acres
Maricopa Star Company, W. % of N. W. 14.........,......... “ 20 acres
Spreckles Company, E: % of N. W. 14........................ “ 20 acres
General Petroleum Company, N. E. 14....................... “ 40 acres
The Pacific Midway Company being under obligation to secure a patent, by reason of its contract with Nightingill, who in turn had assumed the obligations of the Obispo Company, made application for such patent on April 28, 1912, basing its application upon the Plawk location. Plaintiff has opposed this application in the Land Office, on the ground that said Hawk location was a fraudulent one, and made by seven dummy locators in conjunction with G. W. McCutchen for the purpose of fraudulently endeavoring to secure for said McCutchen 160 acres" of land, being 140 acres more than as an individual he could claim under the law. The present bill is based upon the claim that the Hawk location was fraudulent for the reasons above set forth, and-that as all of the defendants have entered upon the land, and operated • thereon, under this location and none other, the possession, of each and the claims of each are tainted with the original fraud. The defendants in answer to this charge deny that ther.e was any fraud in any of the locations, but claim that every location subsequent to the Lone Star location of January, 1900, was made in good faith in aid of that location and for the benefit of the original Lone Star locators. ’
The application for the appointment of a receiver will therefore be denied.