Full opinion text
STONE, Circuit Judge. This is the third of three appeals from the final decree (January 31, 1925) entered in one of the two so-called “river bed cases,” this one, of which two cases, involved the title to the bed of the Cimarron river (a tributary of the Arkansas river) where it traversed that portion of the state of Oklahoma formerly belonging to the Creek Nation. The two other appeals and an appeal, involving the same question of title, as to the river bed lands of the Arkansas river have been disposed of in one opinion, this day filed, in No. 7119, United States v. Hayes et al., No. 7166, United States v. Cimarron River Oil Co. et al., and No. 7163, Riverside Oil & Refining Co. v. Cimarron River Oil Co. et al. (C. C. A.) 20 F.(2d) 873. The appeals in that opinion presented the single question of the title to such river bed lands. In that opinion, we affirmed the decree of the trial court adjudicating the title to be in the adjoining upland owners. This appellant is an upland owner and her appeal is not from that portion of the decree determining title to the bed lands (which is in her favor). She complains of those portions of the decree governing the extent or amount of her recovery from certain lessees who produced oil from the river bed lands adjoining her upland property. Only such facts as are material to an understanding of the present controversy will be stated here as other facts more germane to the question of title are stated in the other opinion. A part of the Cimarron river runs through lands formerly belonging to the Creek Nation. These lands were allotted or sold under the Creek Original Agreement and the Creek Supplemental Agreement. Thereafter, oil was discovered under the river bed lands. The state of Oklahoma promptly laid claim to these river bed lands on the ground that the Cimarron river was a navigable stream. It executed leases for oil development thereof to various parties. The Creek Nation claimed these lands on the grounds that they were included in the patents to the Nation from the United States; that they were not included in the allotments or sales under the above agreements and that the Cimarron river was not a navigable stream. To protect and' determine this title urged by the Creek Nation, the United States filed, as trustee and guardian of the Creek Nation, an action against these lessees. The state immediately filed an intervention therein, setting up its title and right to make the leases. Both contenders realized the imperative necessity of extracting the oil from this land to prevent drainage and loss thereof through development on the immediately adjoining uplands. The state and the United States agreed upon a plan to effectuate this preservation of the oil. This took the form of a stipulation. The above complaint, intervention and stipulation were filed on December 27, 1913. The preamble of the stipulation is as follows: “Whereas, the ownership and right to the possession of the lands described in complainant’s bill of complaint herein, and the deposits of oil and gas underlying said lands, is the subject of controversy between complainant and said interveners, to be determined in this suit, complainant claiming title and right of possession to be in its ward, the Creek Nation of Indians, and said interveners claiming title and right of possession to be in themselves and their lessees (the defendants herein) ; and ■ “Whereas, it is believed by complainant and said interveners to be desirable that the production of oil and gas from said lands be gone forward with pending this suit and pending the ultimate determination of the ownership and right to the possession of the said lands; and “Whereas, to that extent it is satisfactory to complainant and said interveners for such production to proceed under the leases heretofore executed by said interveners to the defendants herein, which said leases are sought by complainant’s bill to be cancelled, and copies of which are attached to said bill as Exhibits B, C, D, E and' E.” g The concluding two paragraphs of the stipulation are as follows: “This stipulation is not to be taken ,as a recognition or concession by complainant of any title or interest of interveners in and to the said lands and the oil añd gas thereunder, or as a recognition of the validity of said leases, or as a recognition or concession by said interveners of any title or interest of complainant in and to the said lands and the oil and gas thereunder, and is entered into for the sole purpose of hastening the development and conservation of the oil and gas underlying the said lands,, and for the protection of whomsoever may ultimately be decreed by the court to be the owner of and entitled thereto, said development and conservation being necessary by reason of the oil and gas development and operation oh the adjacent uplands; and nothing herein contained shall operate to relieve any lessee from fulfilling any agreement he may have with the Commissioners of the Land Office of the state of Oklahoma relative to the payment of the costs of litigation. “Any person not now a party to this suit who claims an interest in any of the several tracts or parcels of land described in the bill of complaint herein may be made a party to this cause and receive the benefits of this stipulation upon subjecting himself to the jurisdiction of this court and agreeing to be bound by the provisions hereof.” Erom the above quotations from the stipulation, it is clear that the purpose and the sole purpose of this stipulation was to conserve the oil without prejudice to the rights of whoever might be adjudged the owner of the river bed lands and that it was thought this might be best done through the instrumentality of the leases given by the state and by impounding the royalties therefrom as representing the land owners’ share from the production. The remainder of the stipulation provided a method of assuring prompt and proper production by the lessees and of insuring prompt and proper payment and impounding of the royalties from such production. This method contemplated two coordinated and cooperating agencies to secure the above results. One of these was a “supervisory committee” of two members, one chosen by the United States and the other by the state. The other was a receiver to be appointed by the court. The duties of the “committee” were to supervise the proper production by the lessees; to supervise the sale of the oil constituting the royalties; to promptly report to the receiver the amounts of royalties accruing from each lease; to supervise and direct the payment of the proceeds from sale of the oil to the receiver; to demand full performance of such lessees and promptly report failure or refusal to so perform and to report fully to the court, at least as often as every 30 days. The duties of the receiver were to promptly and diligently collect and keep accurate account of all royalties, rentals and bonuses, under the leases; to safely preserve the same “subject to be disbursed only under an order of court to whomsoever may ultimately be adjudged to be the owner of said lands and entitled thereto”; to take charge of and operate any property upon default of the lessee and to report fully to the court. The stipulation provided, also, “that all oil and gas produced from said lands under the said leases over and above the royalty, rental and bonus portion thereof shall become and be the property of said lessees and their assigns free from any claim of complainant or the said interveners.” Three days later (December 30, 1913), this stipulation was presented to the court as and treated as an application “for the appointment of a receiver and for the appointment of a committee of two persons to supervise the production of oil and gas under the leases mentioned in the bill of complaint.” Thereupon, the court found sufficient grounds for appointment of a receiver and made such appointment. It was made the duty of the receiver “to collect and receive promptly and diligently all rentals, royalties and bonuses due or to become due from any person, firm or corporation under the leases described in the bill of complaint herein, and safely to keep and preserve the same subject to be disbursed only under an order of this court to whomsoever may ultimately be adjudged to be the owner of the lands described in the bill of complaint herein, and entitled thereto”; to keep accurate accounts and to make monthly reports. He “is hereby ordered to take full custody and control of the several tracts or parcels of land described in said bill of complaint, subject only to the possession of the lessees or their assigns for the production of oil and gas therefrom under the said leases, and he is hereby empowered and authorized to go upon said several tracts or parcels of land at any time and make such inspections and investigations as will in his judgment enable him to perform properly his duties, power and authority under this order of appointment.” The court appointed, also, a “supervisory committee” with the powers as outlined above from the stipulation. The order provided also as follows: “It is further ordered and adjudged that all oil and gas produced from any of said lands under the said leases in excess of the amount stipulated in said leases to be paid as rentals, royalties and bonuses, shall become and be the property of the lessees of the Commissioners of the Land Office of the state of Oklahoma and their assigns, free of any claim on the part of complainant or the said interveners.” Seventeen days after entry of the above order (January 16, 1914), this appellant (then a minor) filed her intervention by her guardian. After setting up her title, as owner of the shore lands, to certain adjoining portions of the river bed lands and declaring the state leases thereon to be void and a cloud upon her title, her petition proceeds as follows: “Intervener alleges, that by and through her said guardian, T. J. Porter, and with the approval of the county court in and for Muskogee county, Oklahoma, which has jurisdiction over her said guardianship, she made and entered into a certain contract dated -, 1913, with the Number One Oil Company, one of the defendants herein, whereby the said intervener would intervene in this action, and set up her right, title, claim and interest in and to all that part of the river bed between lots six and seven in section five, township eighteen north, range seven east, and that said Number One Oil Company, claiming under its lease from the state of Oklahoma, should have the right to take and appropriate all the oil and gas produced under its said lease with the state of Oklahoma on that part of the Cimarron river bed in excess of the royalties agreed to be paid by said Number One Oil Company to the state of Oklahoma, all of which royalties produced from said river bed intervener claims. A copy of said contract is hereto attached, marked ‘Exhibit A/ and made a part hereof. “The intervener hereby expressly consents to and agrees to be bound by the stipulation filed herein on December 30, 1913, by and between the United States, complainant in this action, and the state of Oklahoma, and agrees that all the oil and gas produced on said premises by the Number One Oil Company known and described in said stipulation as the rental, royalty and bonus interest, may, pending the final determination of this action, be paid over to the receiver appointed by the court herein, and the oil and gas in excess of said rental, royalty and bonus interests, may be paid over to and received and appropriated by the Number One Oil Company, or its assigns. “Premises considered, the said intervener, Sarah Rector, through her guardian, T. J. Porter, pleads, that she be permitted to interplead herein, and to assert her right, title and interest in and to the land in said river bed, and to the oil and gas rentals, royalties and bonuses provided for in said leases from the state of- Oklahoma covering said lands, and that on final hearing, a judgment be rendered in favor of Sarah Rector to all of said land which lies below high-water mark between said lots six and seven in said section 5, township' 18 north, range 7 east, and which lies between the meander lines on either side of said river, together with the oil and gas royalties derived and to be derived therefrom. “That, on final hearing, a judgment also be entered in favor of Sarah Rector to said land which lies below high-water mark on the south side of said river, to the center or thread of said river, in the north half of the southeast quarter of said section six, township 18 north, range 7 east, and from the meander line of said lots nine and ten in said section six to the center of said stream, together with the oil and gas royalties derived and to be derived therefrom, and that she be adjudged to be the owner thereof, and that the complainant be decreed to have no claim or title thereto, and forever enjoin the complainant from asserting any interest whatever in said lands adverse to the intervener, and that she be awarded all other relief, both general and special, to which she may be entitled.” On March 21,1914, appellant filed an answer to the intervention of the state wherein she denied the title of the state, alleged title in herself, denied validity of the state leases and prayed adjudication of title in her; that said state leases be declared invalid and a cloud upon her title and that “she be declared to be the owner of all the royalties and rentals and bonuses derived and to be derived from the oil and gas therefrom, and that intervener, Sarah Rector, have all other relief to which she may be entitled, both in law and in equity.'” July 22,1915, the court entered an order, in part, as follows: “That in addition to the powers conferred and the duties imposed on the said receiver by the order of this court made and entered on the 30th day of December, 1913, the receiver shall have the power and authority, and it shall be his duty to exercise all authority, and perform all the duties heretofore imposed on and required of said supervisory committee; that pending the final determination of this suit and until otherwise ordered by the court, the development for and production and the sale of oil and gas from the premises described in complainant’s bill of complaint in this action, shall be proceeded with in accordance with the terms of said leases and under the rules and regulations heretofore promulgated by the Commissioners of the Land Office of the state of Oklahoma and the supervisory committee heretofore appointed under order of the court, and under such rules and regulations as may be hereafter promulgated by said receiver; and said receiver is hereby authorized to amend or modify any rule or regulation heretofore promulgated when the same in his judgment will be advantageous in the development for and production of oil and gas from said premises and in the general conduct of said receivership; that said receiver shall determine all questions concerning the proper production of oil and gas from said lands and the proper development for the operation of oil and gas wells thereon; and shall determine the amount of rental, royalty and bonus accruing from the operation of each well, whether oil or gas, and the amount of oil and gas produced and sold, the price obtained therefor, and all other matters and things concerning the proper development for and the production and sale of oil and gas from the premises covered by each of said leases, and shall make report thereof to this court under oath, as often as once in each thirty days, said report to be made not later than the 15th day of each calendar month, and a copy of which said report shall be furnished promptly by the said receiver to the secretary of the commissioners of the Land Office of the state of Oklahoma; that said receiver shall sell all rental, royalty and bonus portions of said oil and gas produced from said premises at least once in every thirty days unless otherwise directed by proper order of this court, and all proceeds therefrom shall be held and accounted for by said receiver under the orders of said court which have been heretofore or may be hereafter made, and that should the said lessees or their assigns, or any of them, fail, neglect or refuse to proceed with the drilling of wells and the production of oil and gas under and in strict accordance with the terms of said leases and such rules and regulations, the said receiver shall demand of such lessee or his or its 'assigns, that he or it make good his or its default, and upon his or its failure so to do within a reasonable time, said receiver shall report such fact to this court, and after notice given and hearing had, such action shall be taken in the premises as may be provided by proper order of said court.” This order 'continued the “supervisory committee” as an “advisory committee” to the receiver. The order provided, also, as follows: “It is further adjudged and decreed that said receiver shall be empowered, and it shall be his right and duty, to go upon any and all portions of the premises covered by any and all of said leases during any and all times, and make such inspections and investigations concerning the development for and the production, storage, sale or removal of said oil and gas from said premises as will in his judgment enable him to properly perform his duties fully under said receivership. “It is further ordered and decreed that all orders heretofore made in this cause fixing and defining the power and authority and prescribing and imposing the duties of said receiver and all orders pertaining in any manner to the appointment of said receiver and the conduct of said receivership shall be and remain in full force and effect except as the same are changed and modified by this order. “This order is made subject to such modifications in any particular thereof as the • court may at any. time hereafter on due notice to counsel and a hearing had, deem necessary and proper for the better conduct of the matters involved in said receivership.” There were two original state leases on different parts of the river bed claimed by appellant. One of these was to the Number One Oil Company for a term of five years from October 1, 1913, on a graduated oil production royalty with a minimum of 16% per cent, on wells producing no more than 100 barrels of oil per day. This lessee seems to have been the holder of that lease at the time of appellant’s intervention and it was with it that her guardians made the contract referred to in her intervention. Thereafter (upon a date not shown in the record), this lease was assigned to the Scioto Oil Company which proceeded with the development thereunder. On December 31, 1914, that company assigned the lease with the development works to Frank Brown. January 8, 1915, Brown filed an intervention setting out the history of this lease and its assignment to him and, alleged that “this intervener now has and holds all of the rights, privileges, easements and interests conferred by said oil and gas lease on said Number One Oil Company, and is entitled to all the rights, interests, privileges and benefits conferred under the order of this court heretofore made appointing the receiver, together with all the rights, interests and benefits provided for and conferred by the stipulation heretofore made and entered into by and between the complainant herein, and the intervener, the state of Oklahoma, including the right to receive and appropriate to his own use and benefit all of the oil and gas produced thereon in excess of the royalty provided in said lease, to be paid to the Commissioners of the Land Offiee, and provided in said stipulation and order appointing the receiver to be paid to the receiver heretofore appointed in this cause.” He prayed “that he be given, allowed and adjudged to have all the rights, interests, and benefits hereinbefore referred to, and that he have all other relief to which he may be entitled.” January 8, 1915, the court entered an order on this intervention as follows: “It is hereby ordered, adjudged and decreed by the court that the said Frank Brown, intervener herein, be, and he hereby is, adjudged to have all the benefits conferred on the lessees of the state of Oklahoma under the stipulation on file in this cause executed by the complainant, the United States, and the intervener, the state of Oklahoma and the Commissioners of the Land, Office, and it is further adjudged and decreed by the court that the said Frank Brown shall have the right to remove and appropriate to his own use and benefit all oil and gas produced on all that portion of the bed of the Cimarron river below the high-water mark in section 5, township 18 north, range 7 east, free of any claim or demand by the complainant herein, and that said intervener, the state of Oklahoma and the Commissioners of the Land Office, and the said Frank Brown is hereby ordered and directed to conform to and comply with each and all of the provisions of the order herein appointing a receiver, and to pay to the receiver all oil and gas produced .on said premises to the extent provided for in said order of the court and as stipulated in said lease executed by the Commissioners of the Land Office in the form of royalties and bonuses.” On March 1, 1915, Brown assigned the lease to the Okla Oil Company (name later changed to Tidal Oil Company). December 4, 1915, the Okla Oil Company filed its intervention in which it states that the lease held by it is jointly executed by the state and the receiver but the lease is not in the record here. Thereafter (date not appearing in record here) the lease was assigned to the Sapulpa Refining Company. December 13, 1916, the Sapulpa Refining Company filed a stipulation (joined in by the United States and the state) setting forth that the average production per well on this lease was less than 100 barrels and was decreasing while the flo.w of water in the wells had greatly increased and was increasing and the expense of pumping this water and other increased expenses had made operation of the lease unprofitable and that it would have to abandon the lease unless the royalty be reduced from .16% per eent. to 12% per cent, and prayed that such reduction be allowed. The court entered an order reducing the royalty to 12% per cent. The date of this order is not shown in the record here. The lease on the other tract claimed by appellant was executed .December 6, 1913, by the state to John Henry and W. T. Barrett and was for five years from date with a flat royalty of 48% per cent, of the oil produced. June 10, 1915, the Mohawk Petroleum Company, to which had been assigned this lease by Henry and Barrett (date not shown), made a new lease with the state and the court entered an order directing the receiver to execute same “as one of the parties lessor therein.” While this new lease is not in this record it appears otherwise that the royalty therein was 25 per cent, instead of 48% per cent, as under the former lease. October 31, 1916, the Mohawk Petroleum Company applied for a reduction of this royalty of 25 per cent, to 12% per cent. December 13, 1916, a stipulation (joined in by the United States and the state) was filed agreeing to such reduction upon condition that the lessee drill three other wells as sot forth therein. On the same day, an order was made reducing the royalty on the above condition as to drilling the- wells. Production proceeded;- the stipulated royalties were paid to the receiver and he holds same subject to the orders of the court. January 29, 1923, the state filed a stipulation that a decree might be entered against it as to title. This stipulation was caused by a decision of the Supreme Court (Brewer-Elliott Oil & Gas Co. v. United States, 260 U. S. 77, 43 S. Ct. 60, 67 L. Ed. 140), handed down on November 13, 1922, which held that the Arkansas river was not navigable above the mouth of Grand river. This stipulation, joined in by the United States, provided that “the interveners holding, under leases executed by the Commissioners of the Land Office of the state of Oklahoma, or by the receivers appointed in this cause, shall, on account of their development and operation of said'premises, be awarded such rights and equities as the court in its discretion may deem just. It is further stipulated and agreed that all oil and gas produced from said lands under leases from the Commissioners of the Land Office of the state of Oklahoma, or the receivers appointed in this cause, over and above the royalty, rental and bonus portions thereof, shall remain the property of such lessees or their assigns, free of any claim on the part of the plaintiff.” January 29, 1923, the cause was referred to a master to take evidence, to make findings of fact and to state conclusions of law. This order also directed the master “to take an accounting among the parties hereto, plaintiff, defendants and interveners, and to ascertain, determine and report as to what sum or sums, each of said parties may be entitled to, from and out of the moneys now impounded in the hands of the receivers heretofore appointed herein, and of any other moneys derived from oil and gas produced from said lands; and shall also ascertain and report the value of all improvements placed on the respective tracts of land operated by the different lessees or their assigns, and the cost and expenses laid out by them in developing and operating the different leases and in producing and marketing the oil and gas produced by them.” May 21, 1924, the master filed his report. This report contains a review and discussion of the questions involved; a finding of facts and a statement of conclusions of law. In so far as the issues raised by this appeal are concerned, the views of the master are summarized in the conclusions of law as follows: “(8) The various allottees and purchasers at unallotted land sales, and their vendees, were, at the commencement of this action, the owners of all oil and gas between the meander line and the thread of the stream in front of their various lots. “(9) None of the allottees or purchasers at unallotted land sales are parties to any of the leases executed by the Commissioners of the Land Office of the state of Oklahoma or by the receiver and the Commissioners of the Land Office have no right to complain about the receiver and the Commissioners of the Land Office executing new leases to take the place of the leases executed by the Commissioners of the Land Office nor do they have a right to complain about the orders of the court -reducing the royalties specified in the leases executed by the receiver and .the Commissioners of the Land Office of the state of Oklahoma. These parties are entitled to recover damages to the extent of the difference between the value of the oil and gas and the cost of taking the same, and they are entitled to this without regard to the specifications in the leases or the orders of court reducing the royalties. “(10) The receiver herein had the right to enter into lease contracts with the various lessees holding under the state leases by which the royalties were reduced, subject to the approval of this court. “(11) The approval of this court of the leases entered into by the state of Oklahoma and the receiver to those who were holding under leases executed by the state of Oklahoma are valid and binding. “(12) All orders of the court reducing the royalty and not appealed from are binding. “(13) The leases executed by the state of Oklahoma and the receiver upon these portions of the river bed that had not formerly been leased and were not in litigation in this action, were void. “(14) The various lessees from the state, and from the state and the receiver and their assigns were trespassers in law, but not morally. “(15) The question as to the validity of the various leases is immaterial in determining the amount of recovery because the rule for fixing the recovery is to deduct from the value of the oil and gas extracted the cost of producing the same, and the difference would be the damages suffered. “(16) There being no testimony offered as to the costs of production, the amount of royalty specified in the various leases at the-time of the production should be taken as the difference between the value of the oil and gas and the cost of production. “(17) The amount of recovery in this case, there being no evidence thereon further 'than the amount of royalty specified in the leases, is the amount of the royalty specified in the leases under which the oil and gas were extracted until such lease was changed by new lease or orders of court, and for the oil and gas taken after such change it would be the amount of the royalty fixed by such change or order. “(18) The amount of the recovery by the lessees and their assigns under the riparian lot owners is the difference between the amount of royalty agreed to be paid by such lessees to the owners of the riparian lots and the-amount of royalties collected by the receiver pursuant to the various leases, and orders of the court. Jeems Bayou Fishing & Hunting Club v. United States, 260 U. S. 561, 67 L. Ed. 402. “(19) In calculating the amount of recovery, the amount should be the royalty on all oil and gas that were extracted under the original lease executed by the state of Oklahoma to the various lessees, calculating from the beginning to the time when such lease was changed or a new lease executed, then the amount of royalty from time to time under the new lease for the amount specified as royalty in the new lease; and where by order of court reductions were made of the royalties, the amount taken from the execution of the lease to the order of reduction should be at the rate fixed in the lease, and thereafter at the rate fixed by order of court in all eases where no appeals were taken. “(20) The orders of court approving leases made by the state and the receivers to the various lessees, and the orders reducing the royalties were appealable orders, and all those from which no appeal was taken are final. “(21) The bonuses paid by the various lessees upon certain portions of the Cimarron river should be distributed to the abutting lot owners in proportion to the frontage each owner has on that portion of the river covered by such lease. “(22) Neither the lessees nor their assigns under the riparian owners are entitled to any part of the bonuses. “(23) All costs of this cause including fees and expenses of receivers, fees for attorneys representing the receivers, the stenographer’s fees for reporting the hearing before the master, and cost of securing maps and copies, and the master’s fees and expenses, whatever taxes must be paid, should be paid out of the funds in the hands of the receivers in proportion to the amount to which they are entitled, except that where the riparian lot owners are exempt from taxation under the laws of the United States there should be no part of the taxes taken out of the amount that may be determined to be due them.” • This appellant filed exceptions to the report. Beside setting forth the specific portions of the report to which exception is taken, the exceptions are as follows: “The intervener, Sarah Rector, excepts and objects to the master’s report, both as to findings of facts and conclusions of law, wherein the master found that the measure of damages for the trespass on the part of the river bed lessees, is the royalty impounded in the hands of the receivers. “This intervener further shows the court that as to the matter of the cost of production, referred to in the master’s report, she understood that the master’s report was to be a sectional report and that the first section thereof would deal primarily and solely with the subject of the title and ownership of the river bed, as between the riparian owners and the United States government, and this intervener contemplated that the matter of accounting between the river bed1 lessees and this intervener would be further taken up by the master for the subject-matter of an additional and further report; that this intervener does not have possession of any of the information, books or records to make and furnish such an account to the master, but that her river bed lessees have such information and they should be compelled to account and furnish the same, either to the court or to the master. “Wherefore, this intervener prays the eourt to disapprove all those portions of the report hereinbefore specifically excepted to, and prays the court for an order directing the special master to receive further testimony and make a supplemental report upon the said matters and things hereinbefore specifically referred to, as aforesaid, and specifically as to the matter of the measure of damages to this intervener, as against her said river bed lessees.” January 31, 1925, the court entered its decree overruling all exceptions to the report of the master and adjudicating title to the> river bed lands to be in the adjoining shore owners. It declares all river bed leases made by the state or the receiver or both to be inoperative from the date of the decree without prejudice to the lessees to remove all equipment from the land. Other portions of the decree, here pertinent, are as follows: “In confirming the master’s report herein, the eourt does not find that the river bed lessees who drilled and operated oil and gas wells in the bed of the Cimarron river are trespassers, but on the contrary finds that they are and were at all times since the appointment of the receiver herein rightfully in possession of the river bed under orders of the court.” “It is further ordered, adjudged and decreed that no writ of possession shall issue herein within thirty days from this date and not thereafter except upon application to the court upon due notice served on all adverse parties or their attorneys of record. “Ordered, adjudged and decreed that this cause be retained for the purpose of settling and paying the costs and charges of the said receivership and apportioning to the proper parties their interests in the funds in the hands of the receiver, and for the ascertainment of the rightful claimants and owners of the residue thereof, and the apportionment and payment to them of the same, and further for the purpose of taxing all costs herein, and the making of all proper future orders, and that in the meantime and during the pendency of any and all appeals in this cause, the receiver be continued in his duties heretofore directed, subject to further orders.” It is from portions of this decree that this appeal is taken. Those portions are such as deal with the measure or amount of recovery by appellant (as an owner of the shore land) from the lessees who operated in the river bed. As to such matter, the master determined that the lessees were “technically trespassers” or “trespassers in law, but not morally”; that the measure of recovery from them is “the difference between the value of the oil and gas and the cost of taking the same”; that the burden of establishing the amount of this difference was upon the landowner who seeks the recovery; that no evidence was introduced showing such difference; that, in the absence of such evidence, the impounded royalties, rentals and bonuses (less costs and taxes) should be the measure of recovery. The master determined, also, that the approval by the eourt of the leases executed by the state and/or the receiver to those holding under state leases was valid and binding; that all eourt orders reducing royalties, not appealed from, were binding; that the above measure of recovery (difference between value and cost of production) was applicable “without regard to the specifications in the leases or the orders of eourt reducing the royalties.” While the court overruled all exceptions to the above report and declared the amount of recovery (the royalties less receivership costs reserving the matters of taxes and general costs), the decree overrules the master as to the status of the lessees and the resulting legal measure o£ recovery. It declares that “In confirming the master’s report herein, the court does not find that the river bed lessees who drilled and operated oil and gas wells in the bed of the Cimarron river are trespassers, but on the contrary finds that they are and were at all times since the appointment of the receiver herein rightfully in possession of the river bed under orders of the court.” Appellant dissents both to the determina-' tion in the decree and to that of the master. She contends that the lessees occupy the status of “takers who act under a bona fide claim of right, but who have knowledge of the conflicting claims of others * * * and who, without first having the right , decided, take a chance, and take the oil, and are held to take the consequences thereof, if their claims prove unsound,” and that the proper measure of recovery is “the value of the oil immediately upon severance from the ground, which is the market value of the crude oil at the lease, without deduction for cost of producing.” The opposing position of appellees (lessees) is as follows: They claim no rights of operation through the state leases alone. They contend, first, that their operation was under the receivership and the orders of the court therein, that those orders were properly made for the conservation of the property pending the determination of ownership of the property, that such orders as are here complained of were appealable orders from which this appellant took no appeal in time and, therefore, they became final and binding upon appellant; second, that appellant stood by without objection and with full knowledge while appellees expended large sums and incurred risks in producing this oil in full reliance upon the orders of the court and are, thereby and therefore, estopped from now questioning the terms under which appellant knew the oil was being produced; third, that, if the foregoing contentions are unsound, the status of appellees is that of innocent trespassers with the resulting measure of recovery which is the difference between the value of the crude oil and the entire cost of production. Examination of the opposing contentions of the parties suggests,a logical sequence for the consideration and determination thereof. If the operation of the lessees was, as they contend, under orders of the court, binding upon appellant, in the receivership and those orders have become fixed through failure to prosecute timely appeals therefrom, obviously, that is an end to this controversy. If such orders are binding but were not appeal-able except by appeal from the above decree of the court, "obviously, they are open for such examination and action as this record permits. If the operation was not under the orders of the court in the receivership, but the record establishes the facts from which an estoppel must result, then, obviously, the recovery must be measured by the royalties alone. If the operation was not under the orders of the court in the receivership and there is no estoppel, appellees were, obviously, trespassers of some degree and the measure of recovery is that resulting legally from such status. Our consideration will, therefore, be of the foregoing propositions in the order just stated. There is no dispute as to the right of the United States to bring this action for the protection of land claimed by the Creek Nation. There, is no attack upon the jurisdiction of the court to entertain such action against lessees of the state who were claiming the right to operate upon this land and to take therefrom its principal value, basing such right upon ownership of the land by the state. There is no question of the right of the state to intervene to establish its title and to protect its lessees. As and when filed, the suit was an equitable action involving the question of title to these river bed lands. Had no one been then active or threatening to make use of or to take value from such lands, no receivership-could have been justified and the action could and would have proceeded to conclusion without such. But that was not the situation. Practically the entire value of these lands lay in the oil beneath them. Oil production development was proceeding or threatened on the adjoining uplands. The result of such development would necessarily be drainage of oil from the river bed deposits. The only way in which that loss could be prevented and those deposits secured for whoever might be the owner of the river bed lands was to sink wells therein and procure the oil before it could be drained therefrom. An Urgent necessity existed for the conservation of the oil pending the litigation over the title thereto. Such a situation justified, if indeed it did not require, a receivership. Sueh was sought by the then contending claimants of the title and the court very properly appointed a receiver. The broad purpose of the receivership was to secure and protect development of the river bed oil deposits so that the fruits thereof might be secured and held for whomsoever might be adjudicated the owner thereof. Clothed with full power, as a court of equity, to conserve this property for this purpose, and faced with the clear necessity of proceeding speedily with development of the property, the court had large choice of the method and means of doing so. For example, it could have elothed its receiver with power to and have ordered him to prosecute such development himself. Oklahoma v. Texas, 252 U. S. 373, 374, 40 S. Ct. 353, 64 L. Ed. 619; Id., 253 U. S. 465 and 469, 40 S. Ct. 580, 64 L. Ed. 1015, 1017; Id., 256 U. S. 602, 41 S. Ct. 539, 65 L. Ed. 1114. It could have conditioned such development upon advance of the expenses by the existing lessee (Oklahoma v. Texas, 256 U. S. 603, 41 S. Ct. 539, 65 L. Ed. 1114), or by the disputing claimants (Elk Fork O. & G. Co. v. Foster, 99 F. 495 [C. C. A. 4th]). It could have ordered him to make contracts for development on a royalty basis (Oklahoma v. Texas, 253 U. S. 465, 466, 40 S. Ct. 580, 64 L. Ed. 1015, 1017; Swift v. Black Panther O. & G. Co., 244 F. 20, this court), or to employ others to operate for him and at his expense (Oklahoma v. Texas, 253 U. S. 465, 467, 40 S. Ct. 580, 64 L. Ed. 1015, 1017, also see 254 U. S. 280, 41 S. Ct. 146, 65 L. Ed. 270; and Id., 254 U. S. 604, 41 S. Ct. 317, 65 L. Ed. 434). It could have ordered him to proceed under contracts already made. The choice was a matter of discretion, naturally based upon the actual conditions facing the court and in which jt found the property. Hero those conditions were as follows: There were two contenders for the title, one of which had entered into formal leases for development of the disputed property; those leases were carefully drawn to protect the property owner; they provided for liberal royalties; the receiver had no funds for development; both of the then parties claimant were asking the court to permit the development to proceed under these leases; to prevent development thereunder might involve the lessees in losses or the lessor state to claims; a .plan for so proceeding which would insure prompt and diligent production and safe impounding of the royalties was presented to the court by the then claimants of title. The court chose to use these existing means for development. The existing conditions justified this exercise of discretion. Appellant contends that the court had no power to take this oil through the medium of an invalid lease and relies strongly upon the case of Sperry Oil & Gas Co. v. Chisholm, 264 U. S. 488, 44 S. Ct. 372, 68 L. Ed. 803. The Sperry Case is not applicable because the situation there is, in a legal sense, not at all that here present. There the question was the right of a lessee to continue operation under a lease held invalid. Here the question is the power of a federal court of equity, in a receivership, to employ an existing lease (the validity of which was in dispute) as a means of conserving the property, for whomever was entitled thereto, with full consent of all title claimants then before the court. This position is not tenable for another reason. Appellant formally and expressly consented to this action of the court in her intervention. Another contention of appellant is that the receivership was merely for the purpose of impounding and administering the royalties and did not extend to the leases which were, in a legal sense, left unaffected. The receivership was more extensive than appellant contends. The order appointing the receiver contains the following: “Is hereby ordered to take full custody and control of the several tracts or parcels of land described in said bill of complaint, subject only to the possession of the lessees or their assigns, for the production of oil and gas therefrom under the said leases, and he is hereby empowr ered and authorized to go- upon said several tracts or parcels of land at any time and make such inspections and investigations as will in his judgment enable him to perform properly his duties, power and authority under this order of appointment.” Another provision was that “pending the final determination of this suit, the production of oil and gas from said lands shall be proceeded with under the said leases, and that such production shall be in strict accordance with the terms of said leases and the rules and regulations heretofore promulgated by the Commissioners of the Land Office of the state of Oklahoma and shall be under the immediate supervision and control of a supervisory committee of two persons.” A further provision is that “it is further ordered and adjudged that all oil and gas produced from any of said lands under the said leases in excess of the amount stipulated in said leases to be paid as rentals, royalties and bonuses, shall become and be the property of the lessees of the Commissioners of the Land Office of the state of Oklahoma and their assigns, free of any claim on the part of complainant or the said interveners.” Another provision is that “it is further ordered, adjudged and decreed that should the said lessees or their assigns, or any of them, fail, neglect or refuse to proceed with the drilling of wells and the production of oil and gas under and in strict accordance with the terms of said leases and said rules and regulations, the said supervisory committee shall demand of such lessees or his or its assigns that he or it make good his or its default, and on his or its failure so to do, within a reasonable time, said supervisory committee shall report such fact to this couft, and that should any lessee or his assign wilfully or fraudulently conceal or attempt to conceal any of the production of oil or gas from said leased premises, or wilfully or fraudulently fail, neglect or refuse to give to said supervisory committee or to the receiver appointed hereunder or to this court when demanded, a correct account of the oil and gas produced from his or its leased premises for any designated period, and promptly to pay the royalties thereon, then the said supervisory committee or the said receiver shall forthwith report that fact to this court.” ' ‘ The quoted provisions reveal that the court, through its receiver, took full control of the property subject to the leases, adopted those leases as the means of developing the lands, provided for complete supervision, under its control, of the operation thereunder, impounded the royalties, projected the authority of the court into the leases themselves by assuring to the lessees their rights thereunder, and provided for action by the court in ease the lessees defaulted. This was as potent, in practical results and legal effect, as a formal adoption of the leases as the contracts of the receiver could have been. Under this order, the property was taken over by the court and its operation was under control of and by the orders of the court with all of the resulting rights, liabilities' and protection winch such control and orders carried. Aside from this, when appellant intervened this situation existed and she expressly consented to its continuance and cannot be heard to complain to the contrary. We come next to consideration of the orders of the court reducing the royalties. There were three of these orders. Two of them related to the lease originally made to Henry and Barrett, which were assigned to the Mohawk Petroleum Company. The other, to the lease originally made to the Humber One Oil Company which passed by successive assignments to the Sapulpa Refining Company. The original lease to Henry and Barrett provided a flat royalty of 48% per cent, for oil and was in existence when this action was filed, on December 27,1913. The record here is | silent as to any development by Henry and Barrett or as to the date of the assignment of the lease by them to the Mohawk Petroleum Company. On June 10, 1915, counsel for the United States, for the state and for the Mohawk Petroleum Company presented a new lease covering the same land as the earlier lease to Henry and Barrett. It was stated that the company was the assignee of the old lease and that it had entered into a contract for a new lease with the United States and the state and asked to have this new lease approved by the court and that the receiver be ordered to join in the execution as a lessor. The court ordered approval and that the receiver so join. This new lease does not appear in the record but; from other parts of the record it is clear that one provision thereof was a royalty of 25 per cent. — a reduction from the former lease royalty of 48%- per cent. Thereafter, on October 31, 1916, the Mohawk Petroleum Company applied for a reduction of the royalty from 25 per cent, to 12% per cent., stating “that, after most diligent effort and the exercise of the most rigid economy, it is now apparent that said lease cannot be fully operated and developed without great loss to this applicant, unless the royalty exacted of this applicant be reduced to 12% per cent, of the oil produced therefrom, and 12% per cent, royalty will be a reasonable and equitable royalty to be paid said receiver. Tnat 12% per cent, is the usual and customary royalty charged by owners of property to lessees in the vicinity of said premises.” This application prayed that “an investigation be made in such manner as may be directed by the court and that on final hearing hereof, the said royalty be reduced to 12% per cent, of the gross amount of oil produced on said premises.” On December 13, 1916, a stipulation (joined in by the United States, the state, and the Mohawk Petroleum Company) was filed. This stipulation stated as follows: “Whereas, it appears that at the time of the execution of the said lease contract and the making of the said orders aforesaid, the oil and gas bearing sands underlying the above described portion of the Cimarron River bed were very rich in their deposit of oñ and gas, and the wells drilled on said premises were very prolific producers, averaging as high as several hundred barrels of oil each per day, with no showing of water;, and “Whereas, it now appears from the reports of the said receiver and evidenee furnished by the said lessee that the daily average production of oil from the 13 wells now in operation on the said lease for the nine months ending September 30, 1916, was only 558.86 barrels, and that the daily average production of said lease for the month of October, 1916, was 538.98 barrels; that the decline in monthly production of oil from said land is approximately in the ratio above shown; that one-third of the wells on this property are now making water and the volume of water is rapidly increasing as the production of oil declines; that four of the said wells are now making less than 15 barrels each per day; that the handling of this large volume of water greatly increases the cost of producing oil, as it not only necessitates the installing of larger tubing and rods, but the acid in the water crystallizes the iron in the tubing and rods and so increases the breakage, and makes it necessary to install new tubing and new rods after about each two months’ service; and in addition to the expense of such new material, the expense of labor is greatly increased; that in addition to the above expenses, the expense incident to the operation of river bed properties greatly exceeds that of operating upland properties due to frequent destruction of rigs erected on the river bed by fire and water; to increased cost of getting material to the river bed wells and the great cost of building revertments and other break waters to keep the river at high stages from carrying away all the improvements put upon the river bed lease; and ■ "Whereas, it further appears that owing to the above and many other conditions now existing which make the operation of river bed property hazardous and expensive, and unless a reduction of royalty is granted, the said lessee cannot continue the operation of said property, and the property will be abandoned as exhausted of oil and gas in paying quantities, and believing that best interest of complainant and of the Creek Nation, and of the state of Oklahoma, and of all persons claiming an interest in, or title to, the above described premises will be best conserved by a reduction of royalty to the end that the operation of the property may be continued and said property be kept a producing property for the longest time possible.” Because of the foregoing the court was requested, therein, to reduce the royalty to 12% per cent, "on the condition that the said Mohawk Petroleum Company shall forthwith drill to the Bartlesville sand one additional well on the premises herein described; provided further that in the event said first well so drilled as above provided for shall produce 15 barrels of oil per day or more, then the said Mohawk Petroleum Company shall drill an additional well to the same depth on said premises, and if the said second additional well shall likewise produce 15 barrels of oil per day or more, then the said Mohawk Petroleum Company shall drill a third well to a like depth on said premises, the location of the said three additional wells to be agreed upon by the said lessee and the said receiver; and should the said Mohawk Petroleum Company fail or refuse either to promptly begin the drilling of said additional wells on the conditions herein provided for, or to diligently continue the drilling of said wells until completed, then this agreement shall be null and void and the royalty of 25 per cent, of the gross production of the oil and gas extracted from said premises shall be paid by said lessee as now provided for by the lease contract, and the orders of this court heretofore made: Provided further that in no event shall the reduction of royalty to 12% per cent, of the gross production become effective until the first well, the drilling of which is herein provided for, shall be completed.” The same day the court entered an order reducing the royalty on the conditions stated in the stipulation. The reduction of royalty as to the other tract came about as follows: The original lease to the Number One Oil Company provided for a graduated royalty based on the daily average well production in 30-day periods, the minimum being 16% per cent, “on all wells producing less than 100 barrels per day of twenty-four hours.” December 13, 1916, a stipulation (joined in by the United States, the state and the Sapulpa Refining Company, which had succeeded to the lease through mesne assignments) was filed. The stipulation stated: “Whereas, it appears that under the terms and conditions of said lease and the orders of said court pertaining thereto as aforesaid, the said Sapulpa Refining Company is now required to pay into the hands of the receiver in said cause as royalty 16% of the gross production of all.oil and gas extracted, from said lands, which said royalty is to be held by the said receiver for the use and benefit of the party ultimately adjudged to be the owner of said premises; and "Whereas, it appears that at the time of the execution of the said lease contract and the making of the said orders aforesaid, the oil and gas bearing sands underlying tbe above described portion of the Cimarron river bed were very rich in their deposits of oil and gas, and the wells drilled on said premises were very prolific producers, averaging from several hundred barrels to five and six thousand barrels each per day, with no showing of water; and “Whereas, it now appears from the reports of the said receiver and evidence furnished by the said lessee that the daily average production of oil from the nine wells how in operation on the said lease for the nine months ending September 30, 1916, was only 87.39 barrels, and that the daily average production of said lease for the month of October, 1916, was 76.03 barrel's; that the decline in monthly production of oil from said land is approximately in the ratio above shown; that all the wells on this property are now making water and the volume of water is rapidly increasing as the production of oil declines; that during the month of October, 1916, for each 80 to 85 barrels of oil produced, it was necessary to pump from said wells from 800 to 900 barrels of water; that the handling of this large volume of water greatly increases the cost of producing' oil, as it not only necessitates the installing of larger tubing and rods, but the acid in the water crystallizes the iron in the tubing and rods and so increases the breakage, and makes it necessary to install new tubing and new rods after about each two months’ service; and in addition to the expense of such new material, the expense of labor is greatly increased; that in addition to the above extra expenses, the expense incident to the operation of river bed properties greatly exceeds that of operating upland properties due to frequent destruction of rigs erected on the river bed by fire and water; to increased cost of getting material to the river bed wells and the great cost of building revertments and other break waters to keep the river at high stages from carrying away all the improvements put upon the river bed lease; and “Whereas it further appears that owing to the above and many other conditions now existing which make the operation of river bed property hazardous and expensive, and that for the past several months it has cost the said lessee of the above described premises from 70 cents to $1.25 per barrel to produce oil therefrom, and unless a reduction of royalty is granted, the said lessee cannot continue the operation of said property, and the property will be abandoned as exhausted of oil and gas in paying quantities, and believing the best interests of complainant and of the Creek Nation and of the state of. Oklahoma and of all persons claiming an interest in or title to the above described premises will be best conserved by a reduction of royalty to the end that the operation of the property may be continued and said property be kept a producing property for the longest time possible.” The stipulation requested reduction of the royalty from 16% per cent., the rate due under the lease and the then production, to 12% per cent. This reduction was ordered on a date not shown in the record here. The reasons urged by appellant why these orders reducing royalties are claimed to be not binding on her are summarized by counsel as follows: ■ “A. The allottees were not parties to the leases or to the orders reducing royalties. “B. The orders were not final, appeal-able decrees. “C. Because there was no power in the court to take oil from undeveloped lands,