Sartor v. United Gas Public Service Co.

• Decision Date: 13 July 1936
• Docket Number: No. 8065.,8065.
• Citation: 84 F.2d 436
• Parties: SARTOR et al. v. UNITED GAS PUBLIC SERVICE CO.
• Court: U.S. Court of Appeals — Fifth Circuit

84 F.2d 436 (1936)

SARTOR et al. v. UNITED GAS PUBLIC SERVICE CO.

No. 8065.

Circuit Court of Appeals, Fifth Circuit.

June 6, 1936.

Rehearing and motion to amend judgment denied July 13, 1936.

G. P. Bullis, of Vidalia, La., for appellants.

W. Scott Wilkinson, of Shreveport, La., and H. Flood Madison, Jr., Geo. Gunby, and Frank O. Looney, all of Monroe, La., for appellee.

Before FOSTER, HUTCHESON, and HOLMES, Circuit Judges.

HUTCHESON, Circuit Judge.

The suit was by plaintiffs, lessors in five gas leases, for balances alleged to be due as royalties for the years 1929 to 1932, inclusive. The claim was that the leases entitled plaintiffs to receive as royalties one-eighth of the market price of all gas produced, and that for the period in question they had been paid only 3 to 3½¢ instead of 6½¢, the true market price.

Anticipating the defense that they had accepted as the market price and in full settlement and satisfaction the amounts paid them as royalties, plaintiffs alleged that these were falsely and fraudulently tendered by defendant as the true amounts owing, and they were accepted by plaintiffs in reliance on these statements and in ignorance of their falsity.

The defenses were: (a) Actual payment without fraud, misrepresentation, or concealment of the full, true, and correct market price throughout the period sued for. (b) A complete settlement, accord, and satisfaction. These are the gas royalty provisions of the five leases:

Lease No. 1. "One-eighth of the value of such gas calculated at the rate of market price at well."

Lease No. 2. "One-eighth of the value of such gas calculated at the rate of market price at well."

Lease No. 3. "One-eighth of the value of such gas calculated at the rate of market price at the well, but at not less than 3 cents per thousand feet."

Lease No. 4. "In case lessee shall sell gas at the wells, 1/8 of the amount realized from such sales, and in all other cases when sold or used off the premises, the market price at the well of 1/8 of the gas so sold or used."

Lease No. 5. "One-eighth of the value of such gas calculated at the rate of market price, minimum to be not less than 3¢ per thousand cubic feet."

It would seem, from this statement of the issues and of the royalty provisions of the leases, that the trial of the case would have been a simple matter of taking evidence, on the first issue, as to the market price at the well, and, on the second issue, as to the circumstances under which the royalties had been paid to and received by plaintiffs. Because, however, of the diametrically opposed and completely irreconcilable views of plaintiffs and defendant as to the effect of our opinion in Arkansas Natural Gas Co. v. Sartor, 78 F.(2d) 924, 925, on the admissibility of term pipe line purchase contracts and of testimony as to the prices they dealt with, this was not to be. Because of the persistence and unyieldingness with which these opposing views were pressed upon the trial court, instead of an ordered and consistent process of proof by competent evidence bearing on and developing the issues for a jury verdict, the trial consisted of a barrage of questions, objections, and exclusionary rulings, with the result that, when plaintiffs closed, they had gotten no substantial evidence into the record, and a verdict on that score was directed against them. Plaintiffs are here complaining of these exclusionary rulings and insisting that, because of the District Judge's misapprehension of the effect of our decision, plaintiffs have been in effect deprived of their right to try to the jury the real issue in the case, the market value of the gas at the well.

Defendant, stoutly maintaining that every ruling complained of was correctly made, insists as plaintiffs did when appellees in the Arkansas Case, that appellants are not in a position to complain of them, because their bills of exceptions do not set out in connection with the excluded answers, what was expected to be proved thereby. It cites in support, as plaintiffs did in the Arkansas appeal, our case of Meador v. National Liberty Ins. Co., 53 F. (2d) 731.

The rule appellants invoke is not an absolute one to be applied at all events and without regard to the justice or injustice of an individual application. When, as here, there is not a complaint of a single ruling in a long trial, but of a systematic course of rulings, and the nature of the questions and the whole course of the attempted proof make plain what the evidence would have been, if the answers had been allowed, it would be a sticking in the bark to refuse, on this ground, to consider the assignments.

Since it is plain here what the real difficulty is, what the plaintiffs were trying to do, and what they were prevented by the rulings from doing, we have considered the assignments in the light of the whole record, to determine whether prejudicial error was committed. We think there was. That error proceeded from the difficulty the District Judge found himself in in endeavoring, in the state of the evidence, to give effect to his correct understanding of our former opinion, that, while the pipe line contracts were as documents inadmissible, it was proper, under proper restrictions, to receive the testimony of persons who knew the facts as to the sales made to pipe lines and others, and as to the importance and bearing of the factors entering into those prices.¹ This difficulty was not lightened or made easier by plaintiffs' and defendant's fixed attitude toward our former decision. Plaintiffs, struggling more to avoid its effects than to comply with it, persisted not only in their efforts to introduce the contracts as documentary evidence, but, on having their contents interpreted by persons having no familiarity whatever with the market price in the field, while the defendant, by its objections, in effect that our opinion had made taboo not only the contracts themselves, but any reference to the prices they dealt with, greatly contributed to the confusion of the issues and the frustration of the trial. Persisting in putting forward as witnesses to facts persons whose only knowledge had been obtained by a mere reading of the contracts, and who therefore in testifying were not stating facts but merely trying to put in the record by word of mouth what had in written form been excluded, plaintiffs put the court to ruling after ruling of the same kind, all without error. The assignments Nos. 6, 7, 8, 9, 13, 18, 19, 20, 21, and 22, raising these points, are overruled. In the same way, over objection after objection, they persisted in endeavoring to have the witnesses testify as to the intent of the parties in...