Hatten v. Interocean Oil Co.

• Decision Date: 08 March 1938
• Docket Number: Case Number: 27349
• Citation: 1938 OK 159,78 P.2d 392,182 Okla. 465
• Parties: HATTEN, Rec. v. INTEROCEAN OIL CO. et al.
• Court: Oklahoma Supreme Court

1938 OK 159

78 P.2d 392

182 Okla. 465

HATTEN, Rec. v. INTEROCEAN OIL CO. et al.

Case Number: 27349

Supreme Court of Oklahoma

Decided: March 8, 1938

Syllabus

¶0 1. MINES AND MINERALS - Mining Partnership and Ordinary Partnership Distinguished.

The principal distinction between a mining partnership and an ordinary partnership is that in the former the right of a partner to say whether a new partner shall be admitted to the partnership is absent. One result of this distinction is that a mining partnership, unlike an ordinary partnership, is not dissolved where the interest of one partner passes to another person or persons, as on the death of a partner or the transfer of his interest.

2. SAME - Law as to Accounting Between Members of Ordinary Partnership Applicable.

In the absence of a statute to the contrary, the law as to accounting between members of an ordinary partnership applies to a mining partnership.

3. SAME - Duty of Managing Partner to Render Account.

It is the duty of a partner who manages, conducts, or operates the partnership business to render account of his management of the business, and, acting as trustee for the firm, the accounts rendered must be full, true, and exact. Each partner should be charged with everything he should justly pay or account for to the firm, and credited with everything which the firm, as a distinct entity, should pay or account for to him.

4. ACCOUNT STATED - Definition.

"An account stated is an agreement, expressed or implied, between parties who have had previous transactions with each other, fixing and determining the amount due from one to the other on account, and when such agreement is made, such 'account stated' becomes a new obligation, and takes the place of the one upon the prior account." Williams v. Casparis Bros., 113 Okla. 51, 238 P. 438.

5. SAME - Effect of Retaining Account Rendered Without Objection.

Where an account is rendered by one person to another and the person receiving same retains it beyond a reasonable time without objection, this fact, if unexplained, establishes an assent to the correctness of the account and establishes an account stated. But as to receivers or others acting under authority and supervision of a court, and to parties already in litigation over the same or similar accounts, this rule does not apply.

6. SAME - Question of Fact Whether Series of Accounts Rendered Had Been Retained Without Objection.

Where the evidence is in conflict on the question of whether or not a series of accounts rendered had been retained without objection, the question of whether or not there was an implied agreement that the accounts were correct is one of fact. But where by the great weight of the evidence it appears that the correctness of the accounts was continuously denied, a finding that such accounts became and were accounts stated cannot be sustained.

7. MINES AND MINERALS - Lien on Property of Mining Partnership for Satisfaction of Debts.

The right of one partner to a lien upon the partnership property for money due him from the partnership is governed in this state by section 11630, O. S. 1931. Thereunder "each member of a partnership may require its property to be applied to the discharge of its debts, and has a lien upon the share of the other partners for this purpose, and for the payment of the general balance, if any, due him." That right extends to a mining partnership.

8. SAME - Rights and Obligations of Incoming Partner.

An incoming partner of a mining partnership acquiring his interest by transfer from a former partner is deemed to have taken the property cum onere, subject to an accounting and the payment of partnership debts, and also the amount of any general balance due and owing to other partners on the partnership account.

9. SAME - Action for Accounting Between Partners - Former Partner not Necessary Party.

In an action for accounting between members of a mining partnership, a former partner who has parted with all his interest in the partnership property, though a proper party, is not a necessary party where no personal judgment is sought against such former partner, and the partnership property only is sought to be held liable for any amount found due the plaintiff.

Appeal from District Court, Oklahoma County; Clarence Mills, Judge.

Action by Roy Hatten, receiver of U.S. Cities Corporation, against the Interocean Oil Company and another. From adverse judgment, plaintiff appeals. Reversed and remanded.

Roger Stephens, Howard B. Hopps, and Fred L. Hoyt, for plaintiff in error.

Everest, McKenzie & Gibbens, for defendants in error.

RILEY, J.

¶1 This is an appeal from an adverse judgment in an action for an accounting by plaintiff in error against defendants in error.

¶2 The parties are in the same relation as in the trial court. For convenience the plaintiff corporation will be referred to herein as U.S. Cities and Roy Hatten, as receiver, will be referred to as the receiver. The defendant corporation will be referred to as Interocean and British American, respectively.

¶3 The matters involved include certain transactions with a corporation, not made a party, known as the Lorraine Petroleum Company, which will be referred to herein as the Lorraine.

¶4 The accounting sought involves the operation of two oil and gas leases in Creek county, known and herein referred to as the Deere and Barney leases.

¶5 In February, 1923, the Lorraine, being then the owner of the Deere and Barney leases, entered into a contract whereby it sold an undivided one-half interest in said leases to the U.S. Cities. This contract provided that the Lorraine should have exclusive control and management of said leases for the purpose of operating and developing same, and "shall render" (to U.S. Cities) "as soon as practicable after the first day of each and every calendar month * * * an itemized statement of the expense of operation during the preceding month," and further that the U.S. Cities would on or before the 18th of the month in which the statement was rendered pay to the Lorraine one-half of the cost and expenses of operation and developing said lease for the month covered by such statement.

¶6 The leases were not fully developed at that time, and Lorraine thereafter developed and operated the leases under said contract until about November 1, 1923. It appears that some differences arose between the parties during that period, and in addition thereto it appears that the U.S. Cities had mortgaged or pledged its interest in said leases to the American National Company, to secure certain indebtedness. On the latter date an agreement was entered into between the three parties, Lorraine as first party, U.S. Cities as second party, and American National Company as third party, which agreement after certain preliminary recitals, provided:

"Whereas, certain differences have arisen between said first and second parties as to the operations of said oil and gas mining leases, the expenses incident thereto and the sale by first party of oil produced thereon, and the amount owing by second party to first party on account of the expenses of operation since the §§§§§ day of §§§§§§§§§§, 1923, and

"Whereas, said second party has heretofore caused" to be assigned to the American National Company, the third party as of the §§§§§day of §§§§§§§§§§, 1923, the undivided one-half interest of the second party in and to said leases and the production thereon on and after said §§§§§day of §§§§§§§§§§, 1923, to secure certain indebtedness of said second party evidenced by certain instruments in writing and question has arisen between said first party and third party as to the priority of the respective claims and demands of the said first party against the second party on account of expense of operation and the holders of said indebtedness secured by assignment to the American National Company, as aforesaid, and

"Whereas, said parties have agreed to settle all matters of differences as herein provided, now therefore this contract witnesseth."

¶7 The contract then set forth a statement of the balance due the Lorraine from U.S. Cities as the purchase price of its one-half interest in the leases, with certain contingent deduction depending upon the payment of certain trade acceptances, by a third party, and further deductions representing one-half interest in certain oil then in storage, which Lorraine agreed to purchase at a stated price.

¶8 The agreement then provided:

"Second. That first party will prosecute operations for the production of oil and gas upon said described leases and undertake to dispose of the production thereon to the best advantage possible, and further agree that it will purchase all of the oil produced thereon to the credit of the working interest and not sold to pipe lines at the price of sixty cents (60c) per barrel for the period of sixty days from Seven A. M. (7 A. M.) of this date, and thereafter until the expiration of thirty days from and after notice in writing by first party given to second party, after expiration of said sixty days, and further agrees that it will account to the third party semi-monthly for the oil so purchased less one-half of the current costs of operations (to be deducted monthly) and less any amount then due and owing by the second party to the first party on account of the indebtedness aforesaid. Nothing in this paragraph shall entitle said first party to continue the purchase of said oil at the price of sixty cents (60c) per barrel in event a reliable purchaser thereof for a greater price can be obtained, said first party having notice thereof, in writing and having opportunity to make such sale, provided said first party may continue to purchase such oil upon paying the price so otherwise obtainable."

¶9 The contract then provided for the disposition of the proceeds of oil sold to purchasers other than the Lorraine until the amount due from U.S. Cities should be paid in full. And finally:

"It is mutually understood and

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