245 F. 106 | 7th Cir. | 1917
Smith, owner of lands in Illinois, made an oil lease to Guffey and associates. Thereunder no development work was done. Subsequently Smith made a similar lease to Solley and as? sociates. After the junior lessees had struck oil, the seniors began suit for possession and accounting. At this time the junior interests were owned, by Solley and Johnson, seven-twelfths, and by Hennig and Ellis, five-twelfths. Pending a decision in the Supreme Court (237 U. S. 101, 35 Sup. Ct. 526, 59 L. Ed. 856), Guffey and associates effected a compromise with Solley and Johnson. During the subsequent accounting hearing against Hennig and Ellis in the District Court, Guffey and associates raised a contention that Solley and Johnson should be made to account for an alleged overpayment by the Ohio Oil Company, which had been purchasing the output of the junior lessees. From a denial of this claim Guffey and associates are appealing.
In the written contract of settlement it was provided:
“Appellants [the Guffeys] and appellees [Solley and Johnson] shall share equally in seven-twelfths of the properties and proceeds thereof; that is to say, appellants shall be entitled to seven twenty-fourths and appellees to seven twenty-fourths in the following moneys and properties:
“(a) The money now held by the Ohio Oil Company, amounting to $42,674.83.
“(b) The net proceeds now or hereafter in the hands of Haskell, receiver.”
After paragraphs relating to reciprocal assignments of seven twenty-fourths interests in the leases, filing of stipulations, etc., the contract concluded:
“It is further agreed that the appellees shall not be held liable for seven-twelfths of the $52,330.74 heretofore paid them, Walter Hennig and M. Ellis by the Ohio Oil Company.”
This controversy respecting the facts of the case is concerned principally with what occurred at Findlay; and the success of the Guffeys’ appeal depends upon their ability to establish from the record that they had no knowledge, prior to or at the Findlay meeting, that the Ohio Oil Company had paid to Solley and Johnson before the Guffeys’ suit was begun $39,173.85 and not merely the $30,526.23, which was seven-twelfths of the total payments of $52,330.74. From a full examination of the entire evidence, we give a brief summary of the reasons why we find that the master, who heard the witnesses orally, and the District Judge, who overruled the exceptions to tire master’s report, made no mistake in holding the Guffeys to their stipulation for a dismissal as to Solley and Johnson.
3. vSolley, Johnson, and Hurley (attorney for the Oil Company) are very positive that at the Findlay meeting the correction of “seven-twelfths” in both places in the contract was orally agreed to by all the parties. The Guffeys claim that the correction was made only in their own interest and that the concluding paragraph, was not discussed or mentioned. We regard the positive testimony as the more reasonable and more credible. Furthermore, Hurley identified as an exhibit a tabulated statement from the books of the Oil Company, which showed, not only the several credits for the retained moneys, but also the several distributions made before the suit was begun; and he testified that this statement was on the table before the parties and was examined by all. And a copy of this tabulated statement was furnished to Troup, one of the Guffeys’ attorneys, more than three months before the compromise agreement was executed.
4. Against the Solley and Johnson version of the Findlay meeting the strongest item is the voucher prepared by Hurley to cover the payment of $15,794.46 then made to the Guffeys. It states that the Guffeys are .receiving “the proceeds of one-half of the seven-twelfths working interest oil run from the Smith farms,” and are releasing liability for “moneys heretofore paid Solley and Johnson for the seven-twelfths working interest oil run from these farms.” But it also states that payment is made in pursuance of the compromise contract and a subsequent understanding thereof, “wherein all matters in difference and litigation between these parties are compromised and settled.” And inasmuch as the stated sum, $15,794.46, is greater by $3,347.66 than one-half of seven-twelfths of the money in the hands of the Oil
The decree is affirmed. "
In No. 2406, a companion case, the decree is affirmed.
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