Williard v. Federal Surety Co.

• Decision Date: 29 February 1932
• Docket Number: 6885.
• Citation: 8 P.2d 633,91 Mont. 465
• Parties: WILLIARD et al. v. FEDERAL SURETY CO.
• Court: Montana Supreme Court

8 P.2d 633

91 Mont. 465

WILLIARD et al. v. FEDERAL SURETY CO.

No. 6885.

Supreme Court of Montana

February 29, 1932

Appeal from District Court, Fergus County; F. E. Stranahan, Judge.

Action by Harry O. Williard and others, as trustees of the Gordon Campbell-Kevin Syndicate, a common-law trust, against the Federal Surety Company. Judgment for defendant, and plaintiffs appeal.

Reversed and remanded, with directions.

Louis P. Donovan, of Shelby, and Belden & DeKalb, of Lewistown, for appellants.

Donald Campbell, of Great Falls, and Ayers & Ayers, of Lewistown for respondent.

GALEN J.

This action was instituted by the plaintiff syndicate to recover from the defendant $10,000 damages, alleged to have been sustained in consequence of the issuance of an attachment against plaintiff's property in an action commenced by the Gordon Campbell Petroleum Company against the plaintiff to recover from it the sum of $41,651 on an account stated bond for which attachment was executed by the defendant in the sum of $10,000. Upon issue joined the cause was tried to a jury. Upon the completion of the testimony offered by the plaintiff, the court granted the defendant's motion for a nonsuit, and judgment thereon was regularly entered, from which the plaintiff has appealed.

It appears that the plaintiff at the time the attachment action was instituted was the owner and holder of record of several oil and gas leases on lands located in Cascade and Toole counties, which were by the sheriffs of such counties attached in the action as real estate or an interest therein by filing with the county clerk of Toole county, and with the county clerk of Cascade county, as to property covered by leases held by the defendant in such action in each of said counties, a copy of the writ of attachment, together with a description of the property, or any interest therein standing on the record in the county in the name of the plaintiff, who was defendant in such action. Damages are claimed by reason of the fact that the plaintiff's title to the property was thereby clouded and rendered unmarketable and unmerchantable, and by reason of the fact that the plaintiff herein was put to great expense in bringing about a final determination of the action on the merits in the plaintiff's favor. Gordon Campbell Petroleum Co. v. Gordon Campbell-Kevin Syndicate, 75 Mont. 261, 242 P. 540. The provisions of the undertaking on attachment follow the requirements of section 9259, Rev. Codes 1921, and provide "that if the defendant recover judgment *** the plaintiff will pay all costs that may be awarded to the defendant, and all damages he may sustain by reason of the issuing out of the attachment."

The plaintiff has assigned many errors as reason to reverse the judgment and order a new trial, but all of such alleged errors revolve around the basic question as to whether the attachment of the plaintiff's interest in the several oil and gas leases was legal. Apparently the court took the view that the attachments were illegal and therefore could have been dissolved on motion made in the action, thus summarily removing any possible cloud on the title; and thereby removing from consideration any damages incurred by reason of delay and the expense incident to a trial on the merits. Upon this theory much of the plaintiff's offered evidence as to the value of the property before and after the attachment, and the actual damages by plaintiff sustained in consequence, was refused admission.

In passing upon the admissibility of evidence tendered by the plaintiff in the case before us, the court said: "My present impression is, I do not hesitate to say, that there was no real estate attached in this case. That is my firm impression. *** I really believe at this time I would sustain a motion to strike all the testimony concerning the attachment in this case." And again: "The offer of proof is denied for the reason that as the case now appears this court is of the opinion that the attachment should have been dissolved and discharged immediately, *** in fact, that no attachment was ever made of the properties." Plaintiff's Exhibit P, being an oil and gas lease dated June 3, 1920, executed by Joseph C. Byrne to Gordon Campbell, was admitted in evidence, so as to advise the court of the form of all of the leases involved, the granting clause, and other pertinent provisions of which read as follows: "That the said party of the first part (Byrne) for and in consideration of the sum of One Dollar ($1.00) to him in hand paid by the said party of the second part (Campbell), the receipt whereof is hereby acknowledged and of the covenants and agreements hereinafter contained on the part of the party of the second part, to be paid, kept and performed, has granted, demised and leased and by these presents, does grant, demise and lease unto the said party of the second part, his heirs, successors, or assigns, for the sole and only purpose of mining and operating for oil, gas hydro-carbons and other minerals and the laying of pipe lines and of building tanks, power stations and structures thereon to produce and take care of said products for the term of twenty years, and as much longer thereafter as oil, gas, hydro-carbons or other minerals are found in paying quantities, all those certain tracts of land situated in Toole county, State of Montana, and described as follows, to-wit: (Here is set forth a description of the land) Reserving, however, to the said party of the first part, the right to possess and enjoy the premises above described for any and all purposes other than the purpose for which this grant is made and not inconsistent therewith; provided, however, that the possession and enjoyment of the said premises by the said party of the first part shall not in any way interfere with or impair the rights of the second party to mine and operate thereon for the purposes herein specified. It is agreed that this grant shall remain in force for the term of twenty years from the date hereof, and as long thereafter as oil, gas or other hydro-carbons or minerals is produced therefrom in commercial quantity unless terminated earlier as hereinafter provided. In consideration of the premises, the said party of the second part covenants and agrees: First: To deliver to the credit of the first party his heirs, successors or assigns, free of costs, in the pipe lines to which they may connect their wells or in tanks at the wells, the equal of 12 1/2 per cent. of all oil produced and saved from these premises, or will pay in cash the equal of 12 1/2 per cent. of the market value of said oil, method of payment to be optional with party of the first part. Second: To pay as and for a royalty for the gas from each and every gas well drilled on said premises, the gas from which is marketed and used off the premises, a sum equal to 12 1/2 per cent. of the market value of said gas. Third: To pay as and for a royalty for all other hydrocarbons or minerals marketed from said premises a sum of money equal to 12 1/2 per cent. of the market value of said hydrocarbons or minerals less the cost of production thereof. Fourth: To pay as and for a royalty for all other minerals sold or marketed from the above premises 12 1/2 per cent. of the returns from the sale of said minerals. *** The party of the second part agrees to commence a well on said lease within 36 months from the date hereof. In case no well is drilled for oil or gas or other hydro-carbon on the said lease within three years from the date hereof all rights and obligations secured under this grant and demise shall cease unless the party of the second part shall at the expiration of said three years, elect from year to year to continue this grant and demise in force by paying quarterly in advance twenty-five cents per acre until said well is commenced; and it is agreed that the commencement and completion of said well shall be and operate as a full liquidation of all rent under this provision during the remainder of the term...