Republic Supply Co. of California v. Richfield Oil Co.

• Decision Date: 31 May 1931
• Docket Number: No. 6680.,6680.
• Citation: 59 F.2d 35
• Parties: REPUBLIC SUPPLY CO. OF CALIFORNIA v. RICHFIELD OIL CO. OF CALIFORNIA. NORWALK CO. v. McDUFFIE.
• Court: U.S. Court of Appeals — Ninth Circuit

59 F.2d 35 (1931)

REPUBLIC SUPPLY CO. OF CALIFORNIA v. RICHFIELD OIL CO. OF CALIFORNIA.

NORWALK CO. v. McDUFFIE.

No. 6680.

Circuit Court of Appeals, Ninth Circuit.

May 31, 1931.

A. L. Weil, of San Francisco, Cal., Kirk E. Boone, of Los Angeles, Cal., and Martin J. Weil, of San Francisco, Cal., for appellant.

Henry F. Prince, Robert E. Paradise, and Gibson, Dunn & Crutcher, all of Los Angeles, Cal., for appellee.

Before WILBUR and SAWTELLE, Circuit Judges, and NETERER, District Judge.

WILBUR, Circuit Judge.

William C. McDuffie was appointed receiver for affairs and property of the Richfield Oil Company in an equitable suit brought by reason of the financial difficulties of the company. The Richfield Oil Company was producing and distributing petroleum products, and, among other things, was operating certain oil wells in the Santa Fé Springs District, Los Angeles county, Cal. In connection with the operation of these wells, on October 9, 1928, it entered into an agreement with the Norwalk Company, appellant herein, under the terms of which it agreed to furnish and deliver to the Norwalk Company all the natural gas produced from certain wells operated by it, and the Norwalk Company agreed to transport said gas in its pipe lines to its plant where it would remove the gasoline contained therein, and pay to the Richfield Oil Company one-third of the gross proceeds derived from the sale of all the gasoline extracted from the wet gas furnished it from the Richfield Oil Company's wells, or, at the option of the Richfield Company, upon thirty days' notice, the Norwalk Company agreed to deliver one-third of the gasoline extracted by it from the wet gas furnished it by the Richfield Oil Company. The one-third payable in kind to the Richfield Oil Company was to be stored for ten days by the Norwalk Company in tanks provided by it. After his appointment the receiver delivered to the Norwalk Company 110,869 M cubic feet of gas containing 180,705 gallons of gasoline. The receiver demanded one-third of this amount of gasoline, to wit, 60,235 gallons; but the Norwalk Company refused to deliver this gasoline to the receiver for the reason that prior to the receivership it had delivered to the Richfield Oil Company 217,406 gallons of natural gasoline in pursuance of a supplementary agreement entered into with the Norwalk Company by the terms of which the Norwalk Company delivered to the Richfield Oil Company the entire gasoline content extracted from the gas delivered to it by the Richfield Oil Company. The amount delivered in excess of the one-third to which the Richfield Oil Company was entitled under the contract was 217,406 gallons. In short, at the time of the application for receivership the Richfield Oil Company was indebted to the Norwalk Company for 217,406 gallons of casing head gasoline. The Norwalk Company claims the right to set off the obligation of the Richfield Company to pay for said gasoline against its obligation to deliver to the receiver the 60,235 gallons of gasoline delivered to it by the receiver. The receiver petitioned the court for an order directing the Norwalk Company to turn over the 60,235 gallons of gasoline aforesaid, and in his petition stated the facts with reference to the claim for set-off. The Norwalk Oil Company appeared in response to an order to show cause and contested the matter.

In its brief the Norwalk Company, appellant, claims that the court was without jurisdiction to proceed in a summary manner to order the turnover of the aforesaid gasoline, but on the argument concedes that by its general appearance and opposition to the motion it waived the jurisdictional question. It does, however, contend upon the argument that its opposition to a summary proceeding was equivalent to the...