Amalgamated Royalty Oil Corp. v. Hemme

• Decision Date: 04 August 1922
• Docket Number: 6006.
• Parties: AMALGAMATED ROYALTY OIL CORPORATION v. HEMME et ux.
• Court: U.S. Court of Appeals — Eighth Circuit

282 F. 750

AMALGAMATED ROYALTY OIL CORPORATION v. HEMME et ux.

No. 6006.

United States Court of Appeals, Eighth Circuit.

August 4, 1922

[Copyrighted Material Omitted]

This case was determined in the trial court upon a motion to dismiss, for want of equity, the second amended bill of appellant. The court sustained said motion. Under these circumstances the allegations of fact, well pleaded, being accepted as facts by the court, it seems necessary to a clear understanding of the case that the statements of said second amended bill (hereinafter called 'the bill') be set forth quite fully. It is claimed therein that appellees entered into an oral contract of employment with one William Stein, whereby said Stein was to procure a purchaser for their royalty rights in oil and gas produced and saved by virtue of a lease to one A. P. Crockett of a certain 80 acres of land in Oklahoma owned by them. This lease to Crockett is the usual form of oil and gas lease, granting to the lessee his successors, heirs, or assigns, all of the oil and gas in and under the 80 acres of land, and also the said tract of land, for the purpose of entering upon and operating thereon and removing therefrom oil and gas, and other matters usual and incident thereto. Said lease was for a period of three years from the date thereof, and as much longer as oil or gas were found on the premises developed. There are other provisions in the lease not necessary to be set out.

Appellant also claims in said bill that at the time of entering into the alleged contract with appellees about five oil wells had been developed upon the land, and the royalty rights under the Crockett lease had become fixed and determined; that said Stein procured a purchaser for the royalty, one J. H. Miller, who it is claimed was acting for appellant as an officer and agent, and who offered to pay the price claimed to have been agreed upon as a consideration by F. W. Hemme, acting for himself and as agent for his wife; that said offer of Miller was communicated to F. W. Hemme in a letter from Stein, and accepted by him by telephone. It is alleged that the proposition was to accept $125,000 as the agreed purchase price of the royalty rights of appellees. At the time of the negotiations between the parties there was an outstanding option or agreement between appellees and S. E. Chaney, Paul Webb, and W. L. Herring for the sale of the same land, which agreement had been assigned to the Interior Oil & Royalty Corporation. Suit had been brought in the state court of Oklahoma by appellees to cancel said agreement, but this outstanding agreement constituted a cloud upon the title of appellees, and it is claimed the matter was arranged by conference with the Interior Oil & Royalty Corporation, and adjustment was made providing for the payment of $4,000 to the Interior Oil & Royalty Corporation, $500 of which Stein was to take care of out of his commission, the balance to be taken out of the $125,000 which the Hemmes were to receive, leaving appellees $121,000 net.

Parties by the name of Whitehead and Bland figure somewhat in the transaction. Whitehead is alleged to be an agent of appellant, and was engaged in the real estate business. Bland was an associate of Stein engaged in like business. Certain correspondence between Stein and Hemme, Bland and Whitehead, and Miller and Bland appears in the bill and is so important that the same, consisting of letters and telegrams, is here set out; likewise the allegations of the bill relied on in connection therewith to constitute a contract. In chronological order the same are as follows:

Allegation, transcript of record, pages 2 and 3:

'The plaintiff alleges and says that on or about the 1st day of February, 1919, the defendants acting together, and the said defendant F. W. Hemme acting for himself and as agent for Mary Hemme, his codefendant, made and entered into an oral contract of employment, whereby the said defendants employed and constituted one William Stein their broker and agent for the purpose of procuring a purchaser for them of their royalty rights of oil and gas produced and saved from the above and foregoing real estate, by virtue of an oil and gas mining lease. * * * ' Letter, Hemme to Stein, dated February 1, 1919, transcript of record, page 6:

'Stillwater Okla 2/1 1919

'Mr. W. M. Stein

'Received your letter should say have not thought mutch of sellin my roilty in the first plase it is a good thing for me as it is brings me $4500 per month (2) I wonte know how much you wont out of it (3) it takes $125,000.00 to git it

Your Resp

F. W. Hemme.'

Letter, Hemme to Stein, dated February 2, 1919, transcript of record, page 7:

'Stillwater, Okla 2/2 1919

'Mr. Wm. M. Stein,

'Reseaved your letter wood say maled your a letter yesterday and will say today there is a man in Tulsa that will probably give me $120,000.00 net & all cash the Day I will give him a Warrantee Deed of the pase that is not to me the reason I did not answer I had no notion to sell it until the last few days. I have some trubel with them fellows that I give an option on the lease last year & tha Recorded the contract. Now tha wont release it it will come up in a few days now it does not amount to anything but I cant give a clear title until it is Released them fellows have no right to hold it but tha wont sene money tha payed me a little but nothing on the contract, only interest on the amount wile the contract wose alive.

'Yours resp

F. W. Hemme.'

Letter, Stein to Hemme, dated February 3, 1919, transcript of record, pages 7 and 8:

'Feb. 3, 1919.

'I need not tell you that Mr. Crockett will be able to handle this promptly, but I can assure you that my party is a man of equally as great means, and there will be no difficulty whatsoever in effect this deal.

'If I had been sure last week that I could have delivered this royalty, I could tell you in this letter that it is already sold, but of course, not hearing from you, there was some uncertainty on my part as to the situation, so could not advise my client as to what could be done.

'You will hear from me, Mr. Hemme, at the latest, by Wednesday or Thursday, and if you should come to Tulsa before that time I would like to have you come to my offices, and if I am not here see my associate, Mr. Bland, who is conversant with the situation as I am. Mr. Bland is an attorney and knows all about the contract you had with those people, and attached absolutely nothing of importance to their claim.

'In case the price of $130,000.00 less 5% commission that you will pay me after the money is delivered to you is not satisfactory, I will of course want you to let me know at once, but as you stated in your letter yesterday it takes $125,000.00 to get it, and as I told you in my letter

'With kindest personal regards, I am

'Very truly yours,

Wm. M. Stein.

'Stillwater, Oklahoma, Feby. 12, 1919.

'I do not expect to make another trip to Tulsa, but prefer that our business be transacted here as my attorney and the bank I do business with are located here and I would like to get their advice regarding the matter.

'Yours truly,

F. W. Hemme.'

Allegation, transcript of record, page 9:

'The plaintiff alleges and avers that said royalty rights were (priced) to this plaintiff at the sum of $135,000.00, which your plaintiff orally and in writing agreed to pay as the purchase price for the royalty rights of the said defendants in and to said property and that in connection therewith there were further negotiations in the following particulars, to wit.'

Telegram, Whitehead to Bland, dated February 13, 1919, transcript of record, page 9:

'1919 Feb 13 Denver Colo.

'H. O. Bland New Wright Bldg Tulsa Okla

'Have had consultation with Miller can make deal if you will divide your commission equally with me

Andrew Whitehead.'

Telegram, Miller to Bland, dated February 13, 1919, transcript of record, page 10:

'1919 Feb 13 Denver Colo

'H. O. Bland 512 New Wright Bldg Tulsa Okla

'Have seen Mr. Whitehead will add one thousand dollars to commission providing you divide with Mr. Whitehead wire me if we can close deal on this basis

J. W. Miller.'

Telegram, Bland to Miller, dated February 14, 1919, transcript of record, page 10:

'Tulsa, Okla., Feb. 14, 1919.

'Dr. J. H. Miller, 1st National Bank Bldg., Denver, Colorado.

'After consultation with Mr. Stein my associate, consent to divide commission three ways. Will therefore give twenty two hundred dollars to Whitehead, which added to your thousand makes thirty-two hundred to him. This is positively our limit. Must deal with Hemme by Monday. See Whitehead and if this arrangement agreeable wire immediately how you expect to close deal within time limit.

H. O. Bland.

'Phone 5762. 513 New Wright Bldg.'

Allegation, transcript of record, page 10:

'The plaintiff alleges that in answer to the above and foregoing telegram the said plaintiff, through its officer and agent, J. H. Miller, accepted all of the terms and conditions laid down in said telegram, and in writing agreed to pay the sum of $135,000.00 for said property in the way and manner following, to wit: That $132,000.00 should be paid into the hands of the agent of the defendants and the defendants, and the remaining $3,000.00 was to be paid in commissions as set forth in the various correspondence and telegrams, and that such acceptance of said terms and conditions and the agreement to pay said sum of money was in writing and by way of a telegram, and was in words, letters, and figures as follows, to wit:

"Copy of Mackay Telegram

"177 Ks sn

1045 P.m. 47

"Denver Colo Feb. 15-19

"H. O. Bland 512 New Wright Bldg., Tulsa, Okla.

"We accept your proposition...