Stanford Petroleum Co. v. Janssen

• Decision Date: 29 September 1949
• Docket Number: 7095
• Citation: 116 Utah 352,209 P.2d 932
• Court: Utah Supreme Court
• Parties: STANFORD PETROLEUM CO. v. JANSSEN et al

209 P.2d 932

116 Utah 352

STANFORD PETROLEUM CO. v. JANSSEN et al

No. 7095

Supreme Court of Utah

September 29, 1949

Moyle, McKay, Burton & White, Salt Lake City, for appellants.

Stephens Brayton & Lowe, Salt Lake City, for respondent.

McDonough Justice. Pratt, C. J., and Wade, Wolfe and Latimer, JJ concur.

OPINION

McDonough, Justice.

Plaintiff sued defendants to recover $ 1,000 paid to defendant Janssen. Defendant corporation counterclaimed for specific performance of a contract for assignment of an oil lease. From a judgment against both defendants awarding plaintiff recovery of $ 1,000 and denying any relief on the counterclaim, defendants each appeal.

Plaintiff is a partnership engaged in the production of a heavy viscous bitumen substance from wells north of Great Salt Lake. It had not yet developed any market for production at the time of the transactions in question. Defendant corporation has a State lease on other land in the same field, which produces the same kind of material. It had some contracts with rubber manufacturers, and had obtained some orders prior to the war, but those markets were lost in consequence of war-time conditions. Beginning in June, 1946, plaintiff entered into negotiations with defendant corporation to acquire the State lease held by the latter. Various offers made prior to September 26, 1946, were rejected. Janssen made a number of contacts on the west coast during the summer of 1946. On September 24, 1946, he came to Salt Lake City and informed Paul W. Harr, general partner of plaintiff company, that he was going east to endeavor to build up a market for this material, and that he desired to know if Harr was interested in joining in the expense of such trip on which Janssen would try to sell the products of both companies.

According to Harr's own testimony, he said to Janssen:

"I will give you a thousand dollars now and if you need any money in the future while you are on the trip, send me an accounting of the money, what you have accomplished and I will see that you are furnished with more money."

On the same day, September 24th, Harr wrote a check in favor of Janssen personally for $ 1,000, and made the following notation on the back of it:

"Only for sales expense, and payment to John F. Janssen, of materials of Stanford Pet. Co. & Rozel Asphalt Co."

Harr also testified that he gave Janssen the $ 1,000 check because he wanted him to get a market for the product; that he thought Janssen was the logical man to develop the market at that time in view of his previous contacts and his experience with the product; and that he expected Janssen to "leave immediately."

Janssen did not leave the same day, but made an appointment with plaintiff for the following day. Janssen endorsed the check for deposit to the account of Rozel Asphalt Company, and on September 25, 1946, withdrew $ 500 to apply on expenses. Janssen's explanation for not leaving the following day was that he had some discussions with plaintiff, and that when he did leave after the controversy arose on October 7, 1946, he went first to the Pacific coast before going east. He testified that certain preparations had to be made before going east, such as obtaining suitable samples, some of which were not available until he completed his trip to the coast. He further testified that he had previously made contacts, and that further contacts without presentation of samples would be useless.

Pending the time Janssen was ready to commence his trip, he had conferences with Harr. On September 26, 1946, through Harr plaintiff presented to defendants a letter whereby plaintiff offered to purchase the State lease from defendant corporation for $ 12,000, payable $ 6,000 upon approval of assignment of lease by the State Land Board, with the balance of the purchase price to be evidenced by a promissory note payable on January 2, 1947, with 4% interest. At the close of the letter appeared the following:

"This agreement shall remain in force and effect for a period of ten days from date and thereafter shall become null and void."

On the bottom of the letter was typed the word "Accepted." The acceptance was signed by defendant Janssen on behalf of the defendant corporation the same day the letter was presented.

Harr proceeded to make out the various papers which he deemed essential to consummate the transfer of the lease. Among those papers prepared by him for signature were a resolution of the board of directors of defendant corporation, and an assignment of lease, both dated September 28, 1946. These documents were duly executed by Janssen on behalf of said corporation and on the date they bear, and Harr presented them to the State Land Board on October 3, 1946. The State Land Board refused to approve the assignment of lease unless the clause providing an overriding royalty of 2 1/2% to defendant corporation were deleted. It also required the plaintiff to execute an acceptance of assignment of lease on forms approved by the board. Harr then telephoned to Janssen, advising the latter that the overriding royalty clause would have to be deleted, and that he would receive a letter in the mail as to the board's requirements. Harr obtained the forms for acceptance of assignment of lease, at the State Land Office. On October 5th defendants received the letter from the board alluded to by Harr. The following day, a Sunday, the parties met and defendants then offered to delete the 2 1/2% overriding royalty provision from the assignment of the lease, and to have such provision covered by separate agreement. All of the papers prepared to that date were prepared by Harr, and according to Janssen's testimony, Harr agreed to make out all the papers as he had previously done.

At 9:30 A.M. on Monday, October 7, 1946, plaintiff delivered a letter to defendants stating that "due to failure to deliver assignment of lease" within 10 days, plaintiff was not interested in negotiating any further for the purchase of said lease, and that all negotiations were thereby terminated. On receiving such letter, Janssen said to Harr: "Then I will sue you." Harr replied: "John, I will take my thousand dollars back."

An argument ensued, and plaintiff commenced this action the same day to recover the $ 1,000 paid to Janssen. The corporation was joined as defendant, summons being served the day suit was filed. Plaintiff alleged that Janssen on September 24, 1946, entered into agreement with plaintiff whereby he undertook to travel immediately to Chicago and other points east, to act as a sales representative for plaintiff and for defendant corporation, to secure contracts for the sale of the products of said two companies for which he was to receive $ 1,000 expense money from plaintiff; that he received a check for said sum; that Janssen failed to render such service, and that he wrongfully endorsed the check over to defendant corporation whereby said corporation became unjustly enriched.

Defendant corporation denied liability for the $ 1,000 allegedly deposited in the account of the corporation by Janssen and withdrawn by him; and the corporation also counterclaimed for specific performance of the contract for purchase of the oil lease, and for damages.

The sole contention made by Janssen on this appeal is that the trial court predicated judgment against him upon a finding that the $ 1,000check was given for services which he failed to render, and that such finding is contrary to the evidence.

The Rozel Asphalt Company makes two contentions: (1) that even if judgment against Janssen could be sustained, the evidence does not show any legal or equitable basis for a judgment against the corporation in the sum of $ 1,000 nor for any other amount. (2) That the court...