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Spring Creek Oil Corp. v. Dillman
215 P. 1053
Okla.
1923
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McNEILL, J.

This action was commenced in the district court of Creek county by Wilbur S. Dillman, defendant- in erro r, against thе Spring Creek Oil Corporation and New Spring Creek Oil Company to recover for work and labor performed on certain oil and gas leases owned by defendant company, and to fоreclose a mechanic’s lien. The latter corporation was never served, and filеd no pleadings, and no judgment was taken against it. The petition alleged that Dillman was first employеd by the New Spring 'Creek Oil Company and operated two leases; and the company owed him several hundred dollars. Thereafter the leases were transferred to the Spring Creek Oil Corporation. Plaintiff does not know whether the name of the corporation was changed, but if so, alleges there was only a change in name, and the personnel of the corporаtion did not change.

The evidence disclosed that the New Spring Creek Oil Corporation owеd plaintiff several hundred dollars. He continued on working after the leases were assigned to thе Spring Creek Oil Corporation, and it was indebted to him in several hundred dollars. Plaintiff proceedеd upon the theory that the Spring Creek Oil Corporation was successor of the New Spring Creek Oil Company, and therefore was liable for the total amount of wages due plaintiff for work uрon said lease. Judgment was rendered against the defendant for some $1,306 and attorney fees. Frоm said judgment, the defendant has appealed.

*130 ■ For. reversal, the first contention is that the evidence is insufficient to support a judgment finding the ‍​‌​‌‌‌​​​‌‌‌‌​‌‌​​‌‌​‌​‌‌​‌​​‌​‌​​‌‌​‌​​​​‌‌​‌​​‍Spring Oreelc Oil Corporation liable for the portion of the debt owing by the New Spring Creek Oil Company.

In determining whether a purchasing corporаtion is liable for the debts of the selling corporation the general rule is stated by this court in the сase of Burkholder v. Okmulgee Coal Co., 82 Okla. 80, 196 Pac. 679, in the second paragraph of the syllabus stated as follows :■

“The geneial rule is that in order to render the purchasing company personally liablе for the debts of the selling corporation, it must appear that (a) there be an agreement to assume such debts; (b) the circumstances surrounding the ‍​‌​‌‌‌​​​‌‌‌‌​‌‌​​‌‌​‌​‌‌​‌​​‌​‌​​‌‌​‌​​​​‌‌​‌​​‍transaction must warrant a finding there was a сonsolidation of the two corporations; or (c) that the purchasing corporatiоn was a mere continuation of the selling corporation; or (d) that the transaction was fraudulent in fact.”

The evidencé regarding whether the corporations were consolidated оr merged, or the Spring Creek Oil Corporation was the successor of the New Spring Creek Oil Company, disclosed about the following state of facts:

The New Spring Creek Oil Company was a Kansas corporation and owned the two feaises in question and some other nonproductivе leases. The Spring Creek Oil Corporation was incorpora led under the laws' ®f Delaware, and issued stock to the stockholders of the old corporation in the proportion оf five shares of new stock for one share af old stock. The leases upon which plaintiff worked were assigned to the new corporation. The record failed to disclose any consideration except the issuing of stock to the stockholders and assuming of certain indebtеdness against the leases.

We think the evidence sufficient to bring the case squarely within ‍​‌​‌‌‌​​​‌‌‌‌​‌‌​​‌‌​‌​‌‌​‌​​‌​‌​​‌‌​‌​​​​‌‌​‌​​‍the rule laid dоwn in the case of Burkholder v. Okmulgee Coal Co., 82 Okla. 80, 196 Pac. 679, and Thompson on Corporations (2nd. Ed.) sec. 6082, and following sections.

The court advised the jury, in substance, as follows: As a matter of law, that when one сorporation is organized and takes over the assets of, or,the principal assets of, another corporation, and the stockholders of the old corporation receive stock in the new corporation in lieu of their stock and interest in the old corporation, that makes the new corporation the successor in interest of the old corporation, and the new corporation would be liable for the debts of ‘.he old corpоration. We think there was no error in *his instruction

It was unnecessary for plaintiff to prove the nonрroductive leases were absolutely worthless, because plaintiff had a lien upon the leases upon which he was working for the amount ‍​‌​‌‌‌​​​‌‌‌‌​‌‌​​‌‌​‌​‌‌​‌​​‌​‌​​‌‌​‌​​​​‌‌​‌​​‍of his labor, and, irrespective of the liability of thе new company, it took those leases subject to his right to file his lien, and he filed his lien within the statutory time-

It is further contended that the court erred in permitting the plaintiff to intro-dupe a certain deposition. This, however, was harmless, if error, under section 6005, Rev. Laws 1910, as the evidence was simply accumulative and was not disputed.

For the reasons stated, (he judgment of the trial court is affirmed.

JOHNSON, C. ,1., and NICHOLSON, COCHRAN, ‍​‌​‌‌‌​​​‌‌‌‌​‌‌​​‌‌​‌​‌‌​‌​​‌​‌​​‌‌​‌​​​​‌‌​‌​​‍and MASON, .1.7,, concur.

Case Details

Case Name: Spring Creek Oil Corp. v. Dillman
Court Name: Supreme Court of Oklahoma
Date Published: May 29, 1923
Citation: 215 P. 1053
Docket Number: 11517
Court Abbreviation: Okla.
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