J.P. Furlong Enterprises, Inc. v. Sun Exploration and Production Company

The State of North Dakota (State) owned the beds of navigable waters within the state, including a portion of the Missouri River. The State also owned all oil and gas under the beds. The State passed a statute to ensure that it would retain title to navigable waters. The statute stated essentially that if a waterway changed its course, the State would swap title with the other landowner to retain title to the navigable water. The statutory history indicated that the law was derived from French and Roman civil law, rather than the common law. It was based on the policy of protecting the public’s right to navigate common waterways. In 1957, North Dakota took by eminent domain title to a tract of land that Emery Papineau owned. Papineau retained “all oil and gas rights.” Subsequently, the U.S. Corps of Engineers dug a trench through the tract. The Missouri River filled the trench and started flowing through the tract. This change in course left an oxbow of former Missouri River riverbed. Ladd Petroleum Corporation and Sun Exploration and Production Company (defendants) leased oil and gas rights for the oxbow from the State. J.P Furlong Enterprises, Inc. and Nantasket Petroleum Corporation (plaintiffs) signed a separate oil and gas lease with Papineau’s successor in interest for the same oxbow. The plaintiffs filed a quiet title action based on the North Dakota statute, arguing that they owned the mineral rights under the oxbow and that the State owned the mineral rights under the newly-formed trench through which the Missouri River began flowing. The trial court held that the North Dakota statute did not apply, because the change in the river’s course was manmade. The trial court thus granted the defendants summary judgment. The plaintiffs appealed.