IN THE SIJPREME COURT OF THE STATE OF MONTANA
CONTINENTAL OIL COMPANY, a corporation,
Petitioner
ELKS NATIONAL FOUNDATION, a legal entity; FLOYD R. YOUNG; CHAD
RANDALL YOUNG by his guardian SHERRY L. YOUNG; JOSHUA LEE YOUNG,
by his guardian SHERRY L. YOUNG, MICHAEL EDWIN MAXWELL, by his
guardian SHIRLEY G. JOHNSON; CORINNA NELL MAXWELL, by her guardian
SHIRLEY G JOHNSON; LOIS E. LaRUE RIGGINS; SHERRY L. YOUNG; JAMES
BYRD; JOSEPH EDWIN MAXERLL, JR.; BETTY WILSON; MARY JO BYRD; THOMAS
A. LARSON and GENE HUNTLEY,
Respondents
ORIGINAL PROCEEDING:
COUNSEL OF RECORD:
For Petitioner:
Chris Mangen, Jr. argued, Crowley, Haughey, Hanson,
Toole & Dietrich; Billings, Montana
For Respondents:
Gene Huntley argued, Baker, Montana
James L. Sandal1 for Amicus Curiae Frank A. Gunnip
t- and Robert P. Schwinn, Billings, Montana
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-l a Submitted: December 13, 1 9 8 8
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3 Decided: January 25, 1989
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Mr. Justice Fred J. Weber delivered the Opinion of the Court.
This is an application for a writ of supervisory control
under Rule 17, M.R.App.P. It follows a summary judgment by
the District Court for the Sixteenth Judicial District,
Fall-on County, which adjudicated the ownership of the working
interest in an oil and gas lease. We accept supervisory
control and reverse the judgment of the District Court.
The issue is whether this Court should issue a writ of
supervisory control to determine the extent of Continental.
Oil Company's ownership in the oil and gas lease.
This case was before the Court previously as Gunnip 17.
Continental Oil Co. (Mont. 1986), 727 P.2d 1315, 43 St.Rep.
1605. That opinion sets forth the complicated history of the
ownership of the working interest in the N4 of the NP3 of
Section 8, Township 7 North, Range 60 East. In all discus-
sion in this opinion, we are referring to that working inter-
est. In the Gunnip opinion, this Court indicated the
ownership of the working interest, as established in previous
judgments relating to the property, as follows: half of the
NjNW$ in H.W. McDonald, subject to a 1962 ratification agree-
ment with Continental Oil Company (Continental), and the
other half of the NjNW$ in Frank Gunnip. Gunnip, 727 P.2d at
1316. The Court remanded the case to District Court for
joinder of essential parties and "to assess Continental's
interest considering potential application of adverse posses-
sion, waiver and estoppel." Gunnip, 727 P.2d at 1317.
The plaintiffs in the present case trace their ownership
in the NqNWt to conveyances from H.W. McDonald subsequent to
the 1962 ratification agreement. The effect of the 1962
ratification agreement was argued on remand. The District
Court ruled that the intent of the parties to the ratifica-
tion was that Mr. McDonald conveyed to Continental one half
of his interest in the NiNW$. It ruled that the ownership of
the N $ N W $ is as follows: one half in Frank Gunnip and his
assigns, one fourth in pl-aintiffs, and one fourth in Conti-
nental. Continental filed a notice of appeal to which plain-
tiffs objected because certification had not been obtained
from the lower court as required by Rule 54 ( b ) , M.R.Civ.P.
We allowed an opportunity for the lower court to c r i y
et' its
partial summary judgment, hut the court declined to do so.
Continental now asks this Court to exercise its power of
supervisory controol. At oral argument, counsel for plain-
tiffs ioined in the request that this Court determine the
interest of Continental in the NiNW$.
Frank Gunnip and his assign Robert Schwinn, who were
formerly plaintiffs, have obtained separate counsel and have
been redesignated by the lower court as defendants. They
have filed a third-party complaint below, asserting their
right to one half of the working interest in the NiNW$. In
their brief to this Court, they take no position on the
application for supervisory control but ask that their
one half interest in the working interest in the N B N W ~ be
acknowledged.
Should this Court issue a writ of supervisory control to
determine the extent of Continental's ownership in the oil
and gas lease?
Our caselaw has set forth the standard to be employed in
determining whether supervisory control under Rule 1 7 ,
M.R.App.P., is warranted. Supervisory control is proper to
control the course of litigation when the lower court has
made a mistake of law or willfully disregarded the law so
that a gross injustice is done and there is no adequate
remedy by appeal; also, to prevent extended and needless
litigation. State Highway Com'n. v. District Ct., Thirteenth
J.D. (1972), 160 Mont. 35, 42-43, 499 P.2d 12281 1232-
As the opinion in Gunnip stated, the 1962 ratification
agreement signed by Mr. McDonald provided that:
. . . the undersigned, H.W. McDonald, does hereby
ratify, adopt and confirm said assignment, in all
things with the same force and effect as if the
undersigned had been named the assignor therein and
had duly executed and delivered said assignment to
Continental Oil Company.
For the same consideration, the undersigned does
hereby transfer, assign, set over and convey unto
Continental Oil Company an undivided one-half ( $ 1
interest in the oil and gas lease above
described .. .
Gunnip, 727 P.2d at 1316. The plaintiffs argue here, as they
did before the District Court, that the ratification is
ambiguous so that a court must look beyond the four corners
of the document to interpret it. The Court was not persuaded
by that argument in Gunnip, nor is it now. We stated:
There remain unresolved issues of material
fact regarding the interest of Continental. Al-
though McDonald conveyed an "undivided one-half
interest" in the Lease under the ratification
agreement, Continental admits in its brief that it
did not treat its 50% interest in the N $ of the NWi
as being derived solely from McDonald until judq-
ment no. 4062 was entered. In 1964 McDonald as-
signed undivided interests to Huntley, Iverson, and
Larson. Huntley, Iverson and Larson have claimed
under this assignment adverse to the interest
Continental now claims under the ratification
agreement. A trial must be held to assess Conti-
nental's interest considering potential application
of adverse possession, waiver and estoppel.
Gunnip, 727 P.2d at 1317.
In the above quotation, this Court recognized that the
ratification conveyed an "undivided one-half interest" in the
lease. Then, as now, we Found no ambiguity in the
ratification agreement. We remanded so that adverse posses-
sion, waiver, and estoppel could be considered as theories
under which Continental might have subsequently lost or
forfeited any portion of its one half interest. The District
Court ignored this Court's opinion and reconsidered the
effect of the ratification agreement. We therefore grant
supervisory control.
We have considered all materials and evidence submitted
by plaintiffs, including copies of certain oil division
orders and correspondence between Continental and plaintiffs'
attorney. We have considered whether those might support a
theory of adverse possession, waiver, or estoppel against
Continental. However, we find nothing to indicate that
Continental has relinquished its claim to any portion of one
half of the working interest in the NjNWa. The documents
reflect Continental's mistaken reliance, at that time, on the
validity of interests claimed by Vernon Eide and J. Von
DeLinde. This ended after the 1 9 7 0 judgment voiding the
conveyance to Mr. Eide and Mr. Von DeLinde and vesting owner-
ship in Gunnip. See Gunnip, 7 2 7 P.2d at 1 3 1 6 . Plaintiffs
contend that the documents demonstrate that Continental
relied upon a conveyance to it from Mr. Eide and Mr. Von
DeLinde. We do not accept that contention. The mere state-
ment in the letters and division order of a supposed interest
held by Eide and Von DeLinde is not enough to establish a
loss of the interest conveyed to Continental from H.W.
McDonald. The documents also indicate that Mr. Huntley and
two other McDonald assigns held interests in the lease. They
do not name the grantor of any of the interests, however.
The documents uniformly show Continental' claim to one half
of the working interest. We conclude that plaintiffs have
failed to present substantial evidence to support a theory of
adverse possession, waiver, or estoppel against Continental.
We therefore reverse the District Court. We hold that
Continental owns an undivided one half interest in the work-
ing interest in the N3NWI. We further hold that Mr. Gunnip
and his assigns own the remaining half of the working inter-
est in the N4NWJ. We remand to the District Court for entry
of judgment establishing the ownership of the working inter-
est in the NiNWJ and for such further proceedings as are
necessary in conformity with this opinion.
We Concur:
Chief ~ u s t i c e d
/'
, Justices
,
for Justice X.C. Gulbrandson.
Retired Chief6~usticeFrank
I. Haswell sitti-ng for ,Justice
,John C. Sheehy.