Colvin v. Sweet, 1688.
| Decision Date | 07 December 1938 |
| Docket Number | No. 1688.,1688. |
| Citation | 100 F.2d 524 |
| Parties | COLVIN v. SWEET et al. |
| Court | U.S. Court of Appeals — Tenth Circuit |
T. Austin Gavin, of Tulsa, Okl., for appellant.
C. A. Steele and W. A. Daugherty, both of Tulsa, Okl., for appellees.
Before PHILLIPS, BRATTON, and WILLIAMS, Circuit Judges.
On the 23d day of December, 1922, J. E. Crosbie, one of the appellees in this action, and the Bradstreet Oil Company, acting through its president, L. G. Bradstreet, entered into an agreement respecting certain oil properties in Ouachita County, Arkansas, jointly owned. It was provided that, in order to secure Crosbie for the monies which he had paid out in their development, and would necessarily pay out to further develop said properties, the undivided one-half interest which the Bradstreet Oil Company owned in these various oil and gas leases, tank farms and contracts, would thereby be assigned to said Crosbie, it being stipulated that when these properties were paid out and Crosbie had been repaid for the advances he had made or would make to the joint account for the development of said properties, he would re-assign to the Bradstreet Oil Company or its successors in interest, the aforesaid one-half interest which under the terms of the contract the Bradstreet Oil Company was assigning to him.
Thereafter the aforesaid properties were exclusively operated and controlled by said Crosbie, great quantities of oil taken therefrom and a portion of the personalty thereon having been sold by Crosbie. In 1925, the Bradstreet Oil Company went into bankruptcy, H. C. Colvin, appellant herein, being appointed as trustee. Said trustee then made a demand in writing upon said Crosbie for an accounting with respect to the said contract. No response being received, subsequently, on January 5, 1934, application was made to the United States District Court for the Northern District of Oklahoma for an order to allow him to employ counsel and institute suit.
Such order was made on January 5, 1934. This action was filed March 31, 1934, appellant's bill of complaint setting forth two causes of action: (1) For an accounting under the contract, and (2) that the assignment be held to be a mortgage and, in the event that on an accounting it was shown that the properties had paid out, that the court should decree that the contract be canceled and the said property be reconveyed.
Attached to the complaint as Exhibits A and B were copies of the contract and letter requesting an accounting.
The appellees herein (co-executrices) filed an answer to said bill, in which they, in substance, admitted the contract, and that it was in effect a mortgage but denied that the properties had paid out. It was also specifically alleged in said answer that appellant had had complete access to the books of said Crosbie and further that in response to an order of the referee in bankruptcy they had filed a full account of the operations of said properties, attaching thereto as exhibits the following:
A. Account filed by appellees in response to order of bankruptcy court.
B. Copy of contract for sale of oil to American Petroleum Company, entered into by J. E. Crosbie and the Bradstreet Oil Company, by L. G. Bradstreet, its president, on December 18, 1922.
C. Account of operations of the said properties during the year 1933 alleged to have been furnished the appellant.
D. Account of operations for January 1, 1934, to April 1, 1934.
In response to defendant's answer there was filed a motion for a further and better statement and to strike out certain parts of defendant's answer and exhibits, in which the complainant asked for more information concerning several items of the accounts as given in defendants' exhibits and asked that certain irrelevant material contained in the answer be stricken. The court after a hearing ordered that irrelevant material be stricken, but overruled the requests for additional information, to which ruling the defendants excepted.
In this hearing it developed that the defendants, J. E. Crosbie and Little Fay Oil Company, a Crosbie property, were willing that an audit be made of the account provided the complainant, trustee for Bradstreet Oil Company, bore the expense. This offer was accepted and the court appointed J. J. O'Brien as an auditor and accountant "to examine the books and records of the defendants, and to report that same into court within sixty days."
To aid the inquiry thus entered into there was filed an application for an order permitting an inventory of the personal property on the leases in question in Arkansas, which was made on condition that L. G. Bradstreet should bear the necessary expenses.
An audit of the accounts and inventory of personal property was made and on June 14, 1937, the matter came before the court for a hearing. Testimony was there introduced on behalf of complainant, and at the conclusion thereof the defendants demurred to the evidence. The court thereupon gave the trustee in bankruptcy and creditors of the Bradstreet Oil Company until June 21, 1937, to decide whether they would advance funds for the cost of an accounting by a master.
When it appeared on June 14, 1937, that said trustee or creditors of the Bradstreet Oil Company were either financially unable to advance the necessary funds to pay for the expense of a master, or did not desire to do so, the court entered judgment for the defendant and against the plaintiff. Plaintiff excepted to the court's decree and by leave of court prosecuted an appeal therefrom.
J. E. Crosbie, Inc., and the Little Fay Oil Company are successors in interest to J. E. Crosbie. They are both owned almost entirely by said J. E. Crosbie, and took the properties with notice of all the facts, and will be treated as one and the same as J. E. Crosbie.
Pursuant to an order of the referee in bankruptcy, in Re Bradstreet Oil Company, Bankrupt, No. 30, the appellees filed a complete statement of the account of the handling of properties involved in this action, being filed almost a year before this action was brought, a copy being attached to appellees' answer and verified by their auditor.
The court made an order on the 10th day of July, 1934, appointing J. J. O'Brien, auditor and accountant, to examine the books and records of the defendants and report same into court within sixty days. Said auditor spent over a year going over the books and records of the appellees. Neither before nor after he made his report did the appellant file any pleading of any kind charging fraud, mistake or mal-administration with reference to the verified accounts attached to said answer of the appellees.
Appellant claims that the trial court (1) erred in failing to sustain complainant's motion for the appointment of a master to take and state an account between said complainant and the said J. E. Crosbie, J. E. Crosbie, Inc., and Little Fay Oil Company, (3) erred in rendering judgment in favor of said appellees, (4) erred in failing to render judgment in favor of said complainant and in dismissing said cause, and (5) erred in failing to decree that complainant as the successor in interest of Bradstreet Oil Company, owned and still owns an undivided one-half interest in all of those certain properties covered by that certain contract sued upon in this case between Bradstreet Oil Company and J. E. Crosbie, dated December 23, 1922, subject to the balance, if any due and owing under the accounting prayed by said complainant.
It is conceded by all parties hereto that "There is no question that the contract entered into * * * was a mortgage of the one-half interest of the Bradstreet Oil Company to secure Crosbie for Bradstreet's half of the sums advanced and to be advanced by him for the purchase, equipment, development and operation of the oil and gas leases covered thereby," and that "a mortgage in possession is required to account for rents and profits."
Appellees concede that the burden rested upon them to prove the correctness of their account, but insist there be sufficient evidence in the record to establish same.
(1) On or about January 17, 1938, attention of the solicitor for appellant was called to the fact that a hiatus existed in the enlargements of time theretofore granted, in that the former enlargements of time expired on October 25, 1937, and no further enlargement was obtained until October 29, 1937. Objection was made on or about January 17, 1938, to the trial court granting a further extension of time, for the reason that under the rules of the Tenth Circuit Court of Appeals his authority to grant further extensions or enlargements of time expired when the previous enlargements of time expired, it then being called to the attention of the solicitor for appellant that the proper procedure was for him to apply to the Circuit Court of Appeals for leave to file and docket his appeal out of time.
In American Gas Machine Co. v. Willcuts et al., 8 Cir., 87 F.2d 924, and Witte v. Franklin Fire Insurance Co. of Philadelphia, 8 Cir., 46 F.2d 894, the transcripts were filed within the term in which the appeal was returnable, there being only a few days' delay from the time order enlarging time expired until the appeal was filed.
In Witte v. Franklin Fire Insurance Co. of Philadelphia, supra, quoting from Midland Terminal Railway Co. v. Warinner, 8 Cir., 294 F. 185, it is stated page 895:
"`It has never "spent its force" because the term of this court at which such case should be docketed has not passed.'"
In Gould v. United States, 8 Cir., 205 F. 883, in an opinion by the late Judge Walter H. Sanborn, it is said page 884:
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