Equitable Royalties Syndicate v. Roseboom

• Decision Date: 11 July 1927
• Docket Number: (No. 155.)
• Citation: Equitable Royalties Syndicate v. Roseboom, 296 S.W. 709 (Ark. 1927)
• Parties: EQUITABLE ROYALTIES SYNDICATE et al. v. ROSEBOOM.
• Court: Arkansas Supreme Court

296 S.W. 709

EQUITABLE ROYALTIES SYNDICATE et al. v. ROSEBOOM.

(No. 155.)

Supreme Court of Arkansas.

July 11, 1927.

Appeal from Union Chancery Court; W. A. Speer, Chancellor.

Action by H. D. Roseboom against the Equitable Royalties Syndicate and others. Judgment for plaintiff, and defendants appeal. Affirmed.

Mahony, Yocum & Saye, of El Dorado, for appellants.

Gaughan & Sifford, of Camden, for appellee.

HUMPHREYS, J.

This is an appeal from a judgment for $10,000, rendered in favor of appellee against appellants in the circuit court of Union county for a commission alleged to have been earned by purchasing an undivided one-half of the one-eighth interest in all gas and oil royalties under and upon 460 acres of land in the Smackover oil field of Union and Ouachita counties, Ark., for appellants from Hugh McKenzie, Mrs. Mary E. McKenzie, and Mrs. M. V. Lenahan. It was alleged, in substance, in the complaint that appellants Equitable Royalties Syndicate and J. W. Capps and F. R. Hill individually agreed to pay appellee 5 per cent. of the purchase price of said royalty interest; that pursuant to the agreement appellee purchased said royalty interest for appellants for $200,000 —$50,000 cash, $20,000 in 30 days, and the balance within 8 months; that after the McKenzies and Mrs. Lenahan transferred said royalties to appellants and the cash payment of $50,000 was paid, appellee requested appellants to pay the commission, which they refused to do, claiming that they had made no agreement to pay her a commission and that they thought she was representing the vendors of the royalty.

Appellants Equitable Royalties Syndicate and J. W. Capps and F. R. Hill filed an answer denying that they, or either of them, entered into a contract with appellee, expressly or impliedly, to pay her for acting as broker for them in purchasing said royalty interests, and interposed the further defense that she represented the vendors of said royalty in the negotiations without disclosing that fact to them, and that by reason of acting in a dual capacity she is precluded from any recovery from them as a broker.

The record discloses that the "Equitable Royalties Syndicate" was an association, composed of a large membership, with an office in Syracuse, N. Y., and with the following officers: Seth B. Squires, chairman; John W. Capps, president; Hugh McKenzie, vice president; F. R. Hill, secretary treasurer, S. C. Daily, assistant secretary; that they operated under a declaration of trust filed for record in Union county, by and through their duly appointed and acting trustees, John W. Capps, F. R. Hill, and Seth B. Squires.

The evidence introduced by appellee, the plaintiff below, is, in substance, as follows:

Appellants employed appellee in October 1922, to purchase said royalties, agreeing to pay her 5 per cent. of the purchase price as a commission for her services. Immediately after making the contract, which was oral, appellee commenced negotiations with the McKenzies and Mrs. Lenahan for the purchase of said royalty interest for said appellants, which negotiations continued during the months of October, November, and December, 1922, and until January 5, 1923, at which time appellee and the owners of the royalty entered into the following written contract, which was attached as Exhibit A to the testimony of appellee:

"H. D. Roseboom, Timber Lands & Investments, Telephone 700. Clarksdale, Miss.

                          "January 5, 1922
                

"H. D. Roseboom, Room 17 Guaranty Bank Bldg., El Dorado, Arkansas: This will be your authority to submit our royalty proposition to Hill & Capps, a one-sixteenth on 460 acres, in section 35 and 36, Ouachita county and Union county, Ark., as discussed at my recent conference with you, price to be $200,000; $50,000 cash, $20,000 in 30 days, and the balance on or before 8 months.

"Five thousand dollars worth of stock to be issued to Hugh McKenzie, and Hugh McKenzie to be made vice president.

"All further details to be worked out to our mutual agreement. Hugh McKenzie. H. D. Roseboom, as accepted Agent for Hill & Capps. "Witness: G. H. Von Behren."

After the aforesaid contract was signed, appellee notified appellants Capps and Hill, by wire, that she had purchased the royalty for them. At that time Hill was in Syracuse, N. Y., and Capps was in Haskell, Okl. About 10 days after Hill and Capps received said information from appellee, they, together with others interested with them, met Hugh McKenzie, representing the owners of the royalty at El Dorado, Ark., and after some further negotiations finally agreed upon details of the purchase and sale of said royalty interest. The final agreement was executed by said appellants and the owners of the royalty the following morning in the office of Mahony, Yocum & Saye. Appellants then left El Dorado without paying the 5 per cent. commission to appellee, and without making any arrangements for the payment thereof. Capps did not call on her before he left, but Hill did, at which time she thanked him for the business intrusted to her by him and his associates. On the 4th of February, 1923, appellee wrote a letter to Capps in which she thanked him for the business, and in which she stated that she was proud of the deal; that she had worked hard to secure the property for him at the price he was willing to pay; that she had secured the property for him, but had had several offers from others to whom she could have sold it at a larger price, but had declined to do so because she had purchased it for him. Capps made no reply to this letter. In March, 1923, appellee wrote appellant Capps another letter, in which she requested him to pay her a commission of 5 per cent. of the purchase price of the royalty in accordance with their agreement. Capps answered the letter denying that he had agreed to pay her a commission for purchasing the property, and informing her that he thought she was representing the vendors of the royalty. All the letters and telegrams which passed between appellee and appellants during negotiations were introduced in evidence by appellee, the purport of which showed that appellee was doing all she could to procure the property for appellants at such price and upon such terms as they were willing to pay. The letters and telegrams were all directed to Hill and Capps, individually; no reference seems to have been made in any of them to the Equitable Royalties Syndicate. During the cross-examination of J. W. Capps, appellee was permitted to introduce a circular letter written by the secretary and treasurer of the Equitable Royalties Syndicate to its stockholders on January 25, 1923, together with an alleged newspaper clipping taken from the El Dorado Daily News on January 17, 1923. The letter gives a detailed account of the conduct of appellants in securing the property, and its contents indicate that they were anxious to purchase it and that it was a wonderful buy for the syndicate. The newspaper article or clipping which was...