Appeal from Circuit Court, Howard County; B. E. Isbell, Judge.
Tom Stone and four others brought their separate actions against Alphonzo Riggs, William Pautz, J. W. Butler, and G. W. McMurray, which were consolidated for the purpose of trial. From a judgment for plaintiffs against the first two named defendants and in favor of the last two named defendants, plaintiffs appeal. Affirmed.
Tom Stone and four other persons brought separate suits in attachment against Alphonzo Riggs, William Pautz, J. W. Butler, and G. W. McMurray.
The complaint in each case alleges that the defendants entered into an agreement of partnership for the purpose of developing certain oil and gas territory in Howard county, Ark., and that in the prosecution of their business the defendants became indebted to the plaintiffs for services rendered in the amount sued for.
The complaint also alleges that the defendants are all nonresidents of the state, and are about to remove a material portion of their property out of the state, without leaving enough to satisfy the plaintiffs' claim.
A bond for attachment was duly executed for each plaintiff. A general order of attachment was issued in each case, and was levied on certain lands belonging to the defendants.
J. W. Butler and G. W. McMurray filed a separate answer in each case. They stated that they composed the firm of the Butler-McMurray Drilling Company, and denied that they had formed a partnership with Alphonzo Riggs and William Pautz. They denied that they were indebted to the plaintiffs in any sum whatever.
All five cases were consolidated for the purpose of trial. An agreed statement of facts was filed in the consolidated case. It was agreed that certain machinery, drilling rigs, and tools, upon which writs of attachment in these cases had been levied, belonged to the Butler-McMurray Drilling Company, and that they were furnished to Alphonzo Riggs and William Pautz in pursuance of the terms of a written contract introduced in evidence. During the drilling of the well mentioned in the written contract referred to, neither member of the firm of the Butler-McMurray Drilling Company had anything to do with the work in any manner, except to visit the well on two or three occasions when they had been notified that the drillers had struck oil. They only visited the well then for the purpose of witnessing the test.
It was, also, agreed that the accounts of the plaintiffs as stated in their several complaints were correct, and that they were for labor performed in digging said well. The written agreement between the defendants, which was signed by them, is as follows:
"This memorandum of agreement, made and entered into this 29th day of April, A. D. 1922, at Mineral Springs, Ark., by and between Alphonzo Riggs, hereinafter called the first party, and William Pautz, hereinafter called the second party, and Butler-McMurray Drilling Company, a copartnership, of Shreveport, La., hereinafter called third parties. Witnesseth:
"That first and second parties hereto have jointly undertaken to develop certain acreage in townships 10 and 11 south, ranges 27, 28, and 29 west, Howard county, Arkansas, for oil and gas upon the conditions hereinafter set forth, and third party has agreed to contribute the use of a rotary drilling rig, tools, and equipment to be used in drilling not more than two wells upon said acreage.
"It is agreed that the parties hereto shall have each an undivided interest in all acreage leased by either of first or second parties, directly or indirectly, for oil, gas, and other minerals in said territory above described in the following proportions, that is to say: First
party shall have an undivided one-half interest in said acreage, second party shall have an undivided three-eighths interest, and third party shall have an undivided one-eighth interest in said acreage; but it is agreed for convenience that all leases shall be taken in the name of first party or transferred to him, and he shall hold the said interest of second and third parties therein in trust for their benefit. This contract shall apply to all leases on lands located in said territory heretofore taken in the name of first party or transferred to him.
"That the financing of said leases shall be undertaken by said Riggs, and shall be done by developing said territory in blocks of about 3,000 acres each, more or less; that the first blocks shall consist of block of 3,000 acres, more or less, including the Deaver farm and lands adjoining or adjacent thereto.
"That a block of 160 acres of the Deaver farm, more particularly described as follows: (Here follows a description of the lands), of Howard county, Ark., upon which a well is now being drilled by the first and second parties hereto, shall be reserved by said Riggs, and by him the profits, if any, from the oil or gas discovered thereunder shall be divided into 1,000 equal undivided parts, so that interests of one-thousandth parts of the net profits therefrom, after paying the necessary operating expenses, may be granted as a bonus with each one hundred dollars ($100.00) paid for acreage to said Riggs, as hereinafter provided for, free and clear of any claim or title thereto by said second and third parties or any person claiming under them, but any interest in the profits from said 160-acre tract not so granted shall be held in the proportions by the parties hereto as hereinbefore provided for.
"It shall be provided in any instrument conveying said bonus interests that a sum not exceeding fifty per centum (50%) of the net profits accruing to any interest in the said 160-acre tract, including the interests of the parties hereto, may be reserved for the costs and expenses of drilling one or more additional wells on said tract, as the same may be justified in the opinion of said Alphonzo Riggs, and for the purpose of obtaining cash to pay for the costs and expenses of completing the said well now drilling, and for paying the rentals due or becoming due on leases included in said block, and other necessary or incidental expenses, including an additional well on said 160-acre tract. If the first shall not show sufficient profit and further drilling is deemed advisable by the parties hereto, the said first party shall divide the lands covered by leases under this agreement adjacent or adjoining said 160-acre tract, into lots of such size as the said first party shall determine, which said lots shall by said first party be sold for such sums per acre as can be obtained by said first party, but in varying amounts as may be determined by the distance of said lots from the well now drilling.
"Any such lots so sold shall be transferred by said first party by an appropriate instrument conveying the title thereto free and clear of any claim or interest therein of the second and third parties or any one claiming under them, but said first party shall faithfully account for all sums so received by him and of all disbursements made by him, but, however, any of said acreage as shall not be so sold shall be held by said first party subject to the undivided interest of said second and third parties as herein provided. From the sums so received said first party shall first deduct any moneys heretofore or hereafter advanced by him for expenses and costs incurred in drilling said well, paying rentals and other expenses. He shall also deduct from such sums the necessary expenses of selling said lots, including...
