Fulp v. McCray

• Decision Date: 16 September 1927
• Docket Number: No. 7752.,7752.
• Parties: FULP et al. v. McCRAY.
• Court: U.S. Court of Appeals — Eighth Circuit

21 F.2d 951 (1927)

FULP et al. v. McCRAY.^*

No. 7752.

Circuit Court of Appeals, Eighth Circuit.

September 16, 1927.

J. P. O'Meara, of Tulsa, Okl. (M. H. Silverman, of Tulsa, Okl., on the brief), for appellant.

F. E. Riddle, of Tulsa, Okl. (Stuart, Coakley & Doerner, of Tulsa, Okl., on the brief), for appellee.

Before KENYON, Circuit Judge, and MOLYNEAUX, and JOHN B. SANBORN, District Judges.

KENYON, Circuit Judge.

Among the questions presented by this appeal is the action of the District Court for the Northern District of Oklahoma in allowing to one J. H. Knox, who had been appointed receiver by said court of four oil leases owned by the Sapulpa Petroleum Company, fees aggregating $3,200 out of the funds of said company. To this we confine our attention.

W. S. McCray, appellee, had pursued an action in the district court of Creek county, Okl., to enforce the specific performance of an alleged contract to assign to him certain oil and gas leases owned by the Sapulpa Petroleum Company. The trial court had decided against McCray's contention, and its judgment had, on the 25th day of September, 1923, been affirmed by the Supreme Court of Oklahoma. McCray v. Sapulpa Petroleum Co. et al., 102 Okl. 108, 226 P. 875. After the decision of that case, McCray brought action in the United States District Court for the Eastern District of Oklahoma against the Sapulpa Petroleum Company, Bates B. Burnett, B. C. Burnett, Anderson T. Herd, and Cushing Petroleum Corporation, to enforce a claimed equitable lien upon the two leases, title to which had been in controversy in the state court, and also upon other leases of the Sapulpa Petroleum Company. On the 4th day of August, 1924, appellant, J. A. Fulp, was appointed receiver of the Sapulpa Petroleum Company by the district court of Creek county, Okl., in the case of C. A. George v. Sapulpa Petroleum Company, and entered into possession of the properties of that company. On the 8th day of August, 1924, McCray filed a supplemental complaint in the United States District Court for the Eastern District of Oklahoma applying for a temporary injunction against carrying out the mandate of the state Supreme Court, and asking the appointment of a receiver for all the leases of the Sapulpa Petroleum Company, except the two leases which had been in controversy in the state court. The court granted the temporary injunction, and appointed J. H. Knox receiver for all the leases of the Sapulpa Petroleum Company, except the two in question. From this order appointing a receiver the Sapulpa Petroleum Company appealed to this court.

A full discussion of these matters will be found in the opinion of this court in Sapulpa Petroleum Co. v. McCray, 4 F.(2d) 645, 651, where it was held that the appointment of Knox as receiver was improvidently made, and the order of the district court appointing him was reversed. It was there said: "For the reason that the pleadings and evidence in this case disclose no equity in the plaintiff, entitling him to any interest or lien upon the property of the Sapulpa Petroleum Company, for the reason that the record in this case discloses the fact that McCray is estopped from maintaining any suit upon any such lien by his former suit in the state court and the decree therein, and for the reason that on the pleadings, evidence, and record at the preliminary hearing neither (1) the fact that there was imminent danger that, unless a receiver of the four leases was appointed, they would be deteriorated in value or their proceeds would be wasted during the pendency of the suit, nor (2) the fact that the plaintiff would suffer irreparable loss from such deterioration and waste, nor the fact (3) that there was a strong probability that the plaintiff would prevail on the merits of this case — facts essential to the appointment of a receiver under the general principles and practice in equity — appeared, our minds have been forced to the conclusion that the appointment of Mr. Knox as receiver of these four leases in this case was improvidently granted, and must be reversed. Folk v. United States, 233 F.177, 183, 147 C. C. A. 183; Jackson v. Parkersburgh & O. V. Electric Ry. Co. (D. C.) 233 F. 784, 790, 791."

While it is undoubtedly true, as stated in 15 Corpus Juris, p. 36, § 29, that "a court of equity has power to impose costs on a party notwithstanding the fact that he is successful in the suit, if the circumstances are such as to warrant doing so," and while the general rule is that, where a receivership proceeding is contested and a receiver is appointed and obtains possession of property under an order of the court which is afterwards reversed on appeal as unauthorized, compensation for such receiver will not be ordered paid out of the funds in the receiver's hands, and the receiver must look for his fee to the party securing his appointment (Beach on...