Cities Service Oil Co. v. Dunlap
Facts
In 1899, heirs of Louisa Rogers divided a 320-acre tract in Texas, and a deed to J. F. Rogers described a boundary by both distance and a call to Wiley Davis's northeast corner, creating a 66-foot discrepancy. In 1930, J. E. Rogers's heirs granted an oil and gas lease to land described in that 1899 deed, and by assignment petitioner became owner under duly recorded conveyances. In 1934, Dunlap obtained a lease from other Rogers heirs covering most of the disputed 66-foot strip and claimed the 1899 deed mistakenly used the Davis corner call, so the strip had been left in common ownership. Petitioner denied mistake and asserted that it and its predecessors were purchasers of the recorded legal title for value, in good faith, and without notice.
Issue
Whether, in federal court, the Texas rule placing on the party attacking recorded legal title the burden of proving that the title holder was not a bona fide purchaser for value without notice is a substantive rule that must be applied under Erie, rather than a mere matter of equity practice or procedure.
Rule
Where Texas law gives the holder of recorded legal title protection as a bona fide purchaser unless the opposing claimant proves that the purchaser did not buy for value and in good faith, that allocation of the burden of proof is not merely procedural. It is part of the substance of the claim and must be applied by a federal court under Erie when adjudicating rights in Texas land.
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If Evan argues that Nora must prove she was a bona fide purchaser for value without notice because she raised that point in reply, how should the federal court allocate the burden?