Opinion — Twist v. Prairie Oil & Gas Co.

SUPREME COURT OF THE UNITED STATES.

—_—

Nos. 301 and 302.—Ocrosex Term, 1926.

Edward C. Twist et al., Petitioners, | On Certiorari to the United

States Circuit Court of

Appeals for the Eighth

Prairie Oil & Gas Company. Cireuit.

vs.

[June 6, 1927.)

Mr. Justice Branprss delivered the opinion of the Court

These cases are here on writ of certiorari to the United States Cir-

euit Court of Appeals for the Eighth Cireuit. 270 U. 8. 639, 640

That court had before it for review, on appeal and cross appeal, a

final decree in equity of the District Court for eastern Oklahoma

The case had been heard by the trial court om the evidence as a suit

inequity; and had been treated as such in both courts by both par-

ties. The Court of Appeals concluded that the trial eourt did not

bave Jurisdiction in equity, ruled, of its own motion, that the ease

must be deemed to have been tried below as one at law on an ora!

waiver of jury; and that. since there had been no waiver filed

with the clerk as provided in § 649 of the Revised Statutes and

no bill of exceptions or special findings of fact as provided in

§ 700. the appellate eourt could not comsider the errors assigned bw

the parties It, therefore, affirmed the judgement on the pleadings

6 Fo 2d) 347, 349 Whether the Court ef Appeals errei in so

ruling is the only question requiring deeision

In 1917 the Prairie On) and Ges Company acquired by assignment

an oil°’and gas lease. together with an extension thereof. and en

tered into possession of the land covered thereby The lessor was

William G. Twist, a citizen of the Cherokee Nation to whom the

land had ‘been allotte’ After Twist’s death and the expiration of

the original lease, his children brought this suit in a state court of

In N ¢ on, 4 ‘ gon flerent lease, were consol iated

The facts stated in the Hien are those of one of thene The same question

iB presented in N 1 concerning a Afth cms

2 Twest et al vs Prawve Ou & Gas Co.

Oklahoma seeking relief on the ground that the extension was in.

valid because of feaud and also because certain statutory require.

ments had not been observed. Two causes of action were therein

set forth In one, damages were sought as for an alleged Trespass

In the other, it was charged that the purported extension of the

lease constitutes a cloud upon plaintiffs’ tithe; and the plaintifs

prayed for a declaration as to the ownership, for cancellation of

the extension, for quieting of plaintiffs’ tithe and for an injun

tion against further trespass or claim by defendant. Such jounder

in a single suit of a cause of action at law with one in equity is

pertiasible under the Oklahoma statute, and under the state law

a@ suit to quiet tithe may apparently be brought by one out of

Possession against one in possession. Compiled Oklahoma Statutes

1921, ¢. 3, Article XIV

The Companys the defendant below, removed the case to the

federal court for eastern Oklahoma on the ground of diversity of

citizenship. In the federal court the jounder of an action at law

with one in equity w not allowable. Murt vo Hollingsworth, 100

US. 100, Chervice Nation v Southern Kansas Ry Co. 1351 8

641, 651. Unless the first cause of action stated in the bill could

have been construed as asking an accounting imeidental to the

equitable relief asked, the pleading should have been recast so as to

separate the action at law from the suit in equity and each case

should have proceeded separately according to its nature Com.

pare Hatcher vo Hendrie & Boltho? Mfg & Supply Co. 10% Fed

267, 271; Amoreidle vo Southern Paving Co, 220 Fel 236. 238.

Neither party sought to have this dome The defendant caused

the case to be docketed as a case in equity and filed a single

answer to both causes of action Therein, it objected that the

petition did not state facts sufflerent in law or in equity, to entitle

the plaintiff to the relief prayed for, or to any rehef, and then,

taking up the several allegations of the petition, admitted some,

denied others, and set up new matter The answer prays that

the petition be diamimsed for want of equity, but also ask» affirma

tive relief It prays ‘‘that the court, by ite decree, declare and

determine that the defendant's title to said oi] and gax lease as

mexdified and extended, is god. walid and subsisting as against the

claim of the plaintiff and that its tithe thereto be quieted as againe

said claims “’ A reply to the new matter was filed by plaintiffs

—

-

The proceedings on the appeals were throughout those eusto-

mary in an equity cause. The records were full and complete.

They include, among other things, all of the evidence. The de-

eree declared that the defendant is the owner of the extended oil

and gas lease covering eleven-fifteenths interest in the deserihed

lands; that two of the plaintiffs are the owners of the remaining

four-fifteenth interest, that these two plaintiffs recover four-

fifteenths “‘of the net proceeds of the oil and gas produced from

said land from September 29, 1919 to April 1, 1923°" (the amount

of which was agreed upon); and that “‘the amount produced

since April Ist, 1923 (be) reserved for further consideration.’

Both the plaintiffs and the defendant appealed to the Cireuit

Court of Appeals. Neither party assigned as error that there was

Jack of jurisdiction im equity or a lack of equity. The errors as-

signed disclosed claims that the District Court erred in admitting

evidence, in excluding evidence; in refusing to set aside the ex-

tension; in tmnaking certain findings; in making certain rulings; in

decreeing that the defendant was the owner of the eleven-fifteenths

interest in the extended lease; in decreeing that two of the plain-

tiffs were the owners of four-fifteenths; in concluding that the ex-

tension of the lease held by the defendant constituted a cloud upon

the tithe of these two and in decreeing the removal of that cloud ;

in concluding that they were entitled to two-fifteenths of the net

proceeds and in ordering payment of the agreed amount

The Court of Appeals held that it was without power to review

Twist ef al. vs. Prairie O & Gas Co. 3

the case as upon an appeal from an equity cause, or to consider

any of the errors assigned Hecause in its opomon there was a

plan, adequate and complete remedy at law, it held that the case

must be ceemed to have been tried in the Distriet Court as an

action at law without a jury. And it applied the rule. that where

an action at law is tried without a jury and there has been no

waiver of the jury in the manner prescribed by the statute and no

special findings or bill of exceptions, the appellate court is with-

out power to review any question except those which arise on the

Process, pleadings or judgment. See Law v Umited States, 266

US 494. United States v Archibald McNed & Sons, 267 U.S.

M2. Pleschmann Construction Co. v United States, 270 US. 349.

86: Cleveland v Walsh Construction Co. 274 Fed. 57. The

Matutory rule limiting the scope of review by an appellate court

+ Tuwust et al vs. Prarie Ou & Gas Co.

in jury waived cases was not applicable to the case at bar. This

is not an action at law.

In federal courts, as in others, a planta? has a right to choose

Whether he will seek to enforce a legal or an equitable cause of

action and whether he will seek legal or equitable relief. He makes

be election and proceeds at law or im equity at his peril, See

Verego Vo Dodge, WS US 160, 164. Formerly, if a plaintiff

in a federal court sued in equity and the objection that there was g

plan, adequate and complete remedy at law was sustained, the

bill was necessarily dismuwed Curnidden vo Middleton, 232 U. 8.

633. . And ordinarily the dismissal was required to be without

prejudice to an action at law, Morshurg v. Baker, 1 Pet. 232, 237;

Thompson ¥ Badroad Companws, © Wall, 134, 139; Van Norden

v Morton, 99 US Sis, 382. Rogers vo Durant, 106 U.S 644.

Seott vo Neely, 140 US. 106, 117, Lecassagne vo Chapwis, 144

tS. 119, 126, though possibly such precaution was unnecessary.

Ach Sheep Co ¥ Lasted States, 202 U S159, 170. Now, under

the Act of March 3. 1915, « 90, § 2744, 3S Stat. 956 and Equity

Rules 22 and 23. if the suit was improperly brought in equity,

either the trial court or the appellate court may transfer the case

to the law side Compare Iiherty Od Co v Condon Bank, 260

Uo SS 235. 241.248: Poeree vo National Benk of Commerce, 265

Fed. 487, 459. EBqustable Trust Co ¥ Denver & Rio Grande BR.

Co, 200 Fed 927, 340 The practice is the same in suits removed

from a state court, exeept that the suit mw remanded to the state

eourt where the equitable rehef sought. although bevend the

equitable yurvedbetion of the federal court, may be granted by the

state court Compare Cafes v. Allen, 149 U_ 8 451; Aaerville ¢.

Southern Parwng Co 220 Fed. 236, 237

The parties cannot, of course, compel the trial court to hear in

equity a «art which seeks a legal remedy for a legal cause of action.

Tewse © Coeds, £9 Wall. 466 Nor can the task of reviewing such

a case as if it were actually an equity cause be imposed upon the

appellate court through consent of the parties See Elthart

Carnage & Meter Car Co + Partin, 9 F (24) 399) Either the tral

court or the appellate may, of its own motion take the objection

that the case snot wothin the equity jaritiction. Compare Reynes

* Demoat_ 130 S 354. 395 Bat that objection, whether taken

aT Act SP" ety : . wach Ey a Pi

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Twist et al. vs. Prairie Oil d& Gas Co, 5

in the trial court or in the appellate court, does not go to the

power of the court as a federal court.

The decree in the case at bar rests upon the second cause of

action set forth in the bill and the answer thereto. We must dis-

regard, as the lower court and the parties did, the first cause of

action. The features of the second cause of action are all those

of a bill to remove a cloud and to quiet title. The bill prays for

a declaration of the rights of the respective parties; for the can-

cellation of an agreement; for an injunction against the assertion

of certain rights; and for general relief. The answer embodied

what is in effect a cross-bill. The relief sought by the bill and the

cross-bill us of a character within the recognized sphere of fed-

eral equity Jurisdiction. See United States v. Wilson, 118 U.S. 86.

The recovery, as upon an accounting, of the agreed amount of the

net profits was 4 normal incident of such a bill. Clarke vo White,

12 Pet. 17s, Is7-1lss; Southern Pacific Co. v. United States, 200

U.S. 341. Compare The Salton Sea Cases, 172 Fed. 792. 799-802;

Chicago, M. & Stl. Ry. Ca. v. United States, 218 Fed. 288, 301-

302. It may be that the bill was fatally defective. But the pro-

ceeding was unmistakably a suit in equity. The plaintiffs at-

tempted to state a cause of action cognizable by a court of equity.

They sought equitable relief.

It is true that ordinarily one out of possession May not bring ina

federal court a bill to quiet title, against one in possession, because

there is a full, adequate and complete remedy at law and the de-

fendant is entitled to a jury trial. See Whitchead v. Shattuck, 138

U.S 146, Black v. Johnson, 177 U. 8. 349. 363-364: Lancaster

v. Kathleen Ou Co, 241 U.S 551, 555. But the suit is of a

class within the jurisdiction —that is the power — of a federal

court sifting im equity There are cases in the federal courts in

which euits im equity to quiet title brought by one out of possession

against one in possession have been entertained, because of the

‘.

special facts, or because of the particular relief sought. or because

the defendant waived the objection of lack of equity jurisdiction.

Sommons Creck Coal Cov Doran, 142 U. 8. 417: Schroeder v.

Young, 161 U. 8. 334. 345. Compare Stewart v Masterson. 131

U.S. 151; Dusgnan v. United States, 274 U. S. —: Jones v.

Prarve Onl & Gas Co, 273 U. 8 —; Kilgore v. Norman, 119 Fed.

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