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Walsh v. Union Oil Co. of California

NOVEMBER 25, 1970.




APPEAL from the Circuit Court of Clay County; the Hon. RAYMOND O. HORN, Judge, presiding.


Rehearing denied April 6, 1971.

This is an appeal from a judgment entered in Clay County for the recovery of money for oil produced from property located in Wayne County to which plaintiff had taken title by tax deeds.

Plaintiff filed her suit in Clay County on the 2nd day of December 1965, alleging that plaintiff was the owner of certain oil, gas and mineral interests in property that the defendant had under lease and from which the defendant had produced oil, for which plaintiff had not been paid. There were in all some 20 separate tracts of producing land with varying amounts of the mineral interest claimed by the plaintiff. All the land is located in Wayne County. All of the plaintiff's interest in the oil, gas and minerals were obtained by tax deeds issued pursuant to order of the County or Circuit Court of Wayne County between December 1960 and August 1968. Plaintiff sought judgment for the amount due and owing from defendant for the accrued oil royalties due and payable "when and at such time as the defendant has disclosed to the plaintiff and to this Honorable Court said amounts of oil royalty so accrued".

Defendant filed its motion to dismiss, averring that the court had no jurisdiction contending that the action was a local, nontransitory action to determine the title to real estate in Wayne County and was in effect an action to quiet title to real estate or an interest therein and by virtue of the provisions of The Civil Practice Act par. 7(2), (ch. 110, par. 7(2), Ill. Rev. Stat. 1965) should be brought in Wayne County where the tracts lie; further that it appeared from the face of the complaint to which copies of the tax deeds were attached that some of plaintiff's alleged interests had not been taxed in the name of any person, corporation or other legal entity but had been taxed in the name of "Suspense Division Order" and therefore could not be the subject of a valid tax deed, and that the complaint was fatally defective for want of necessary parties — defendant. The motion prayed in the alternative that the cause be transferred to Wayne County. It was heard and ordered denied on February 17, 1966.

In March 1966 defendant by way of answer to interrogatories stated in dollar amounts the total amount of oil royalty accrued to the plaintiff's alleged undivided interests in the tracts conveyed to her in the tax deeds, and filed its answer admitting it was either in possession of the tracts as lessee and producer or was the purchaser of the oil produced therefrom. The answer admitted that the tax deeds had been issued by the County Clerk of Wayne County to plaintiff or her assignors; that it had received notice of plaintiff's succeeding to the interests of the former owners and that it had not paid plaintiff any oil royalties accrued on the premises described in the complaint. It pled that it was without sufficient information and unable to determine if plaintiff had succeeded to the interests of the former owners neither admitted nor denied, and demanded strict proof.

The cause was heard on May 23, 1966, and a stipulation was made as to the dollar amounts impounded to the various tracts, and at the conclusion of the taking of the evidence it was agreed that defendant would furnish additional lease and oil production information and the cause was continued. In August 1966 a supplemental Answer to Interrogatories was filed by defendant in response to additional interrogatories that plaintiff had filed.

In May 1967 defendant filed a motion to stay proceedings and as grounds therefore stated that certain actions were pending in Wayne County to have one of the Tax Deeds set aside. Defendant also filed amended and corrected answers and amended and corrected supplemental answers to interrogatories the verifications of which stated that these answers were filed in order to truly and correctly set forth the amount of oil royalty in dollars attributable to the undivided mineral interests allegedly conveyed to plaintiff by the tax deeds.

In June 1967 petitions to intervene for the purpose of staying the proceedings were filed by former owners which were supported by affidavits regarding actions pending in Wayne County to set aside certain of plaintiff's tax deeds involved in this cause; and in which they alleged they would be adversely affected by judgment of the Court in which they were not adequately represented. The Court denied the motion to stay the proceedings and the petitions to intervene on June 12, 1967 and on that day defendant offered and there was heard the testimony of Ochs, its Division Order Specialist, an accountant. He testified that the amended and corrected answers and amended and corrected supplemental answers were the correct amount in dollars that were attributed to or credited to plaintiff's tax deeds, with exceptions which he purported to correct by his testimony. He further testified that he was familiar with the oil and gas leases which covered the lands described in the tax deeds, and that in each of said leases the landowner reserved one eighth of the oil. Cross-examination disclosed the amounts that had previously been allotted and paid to the former holders of the mineral interests as well as the amounts so allocated that had been furnished by defendant to taxing authorities, which amounts were in conflict with the corrected figures presented.


On July 8, 1968, a judgment order was filed in which the court found that the alleged tax deeds had been issued to plaintiff by order of either the County or Circuit Court of Wayne County none of which orders had been appealed from, and that either defendant had admitted certain dollar amounts being withheld and impounded which were due and owing plaintiff from some of the tracts, or which had been produced or allotted as royalty payments due plaintiff from other tracts, to various dates between February 1966 and June 1, 1967. The order also found that the tax deeds vested:

"An incontestable merchantible title to all of said real estate and interests in real estate in the Plaintiff from the respective times of her acquisition thereof and all right and title and interest of any former owner therein by virtue of the provisions of Paragraph 747 of Chapter 120 of 1951 Illinois Revised Statutes and Amendments thereto."

The order then provided a judgment for Plaintiff from Defendant for royalties withheld from her in the amount of $15,132.72 and costs. The order further provided that defendant should pay to plaintiff any and all royalties produced from or allotted to the real estate described since the ...

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