Wright v. Brush
| Decision Date | 02 December 1940 |
| Docket Number | No. 2086.,2086. |
| Citation | 115 F.2d 265 |
| Parties | WRIGHT et al. v. BRUSH et al. |
| Court | U.S. Court of Appeals — Tenth Circuit |
Roy C. Davis, of Hutchinson, Kan. (Warren H. White, of Hutchinson, Kan., on the brief), for appellants.
Howard T. Fleeson and Wayne Coulson, both of Wichita, Kan., for appellees.
Before PHILLIPS, HUXMAN, and MURRAH, Circuit Judges.
This is an action by Olivia A. Snyder and Eva J. Brush against C. T. Wright and Earl C. King, to recover one-half of a bonus consideration paid C. T. Wright for the execution of a community oil and gas lease by him and Eva J. Brush. Both C. T. Wright and Olivia A. Snyder have died since the commencement of the litigation, and proper substitution of parties has been made. The story will be easier to follow if plaintiffs are referred to as Mrs. Brush and the defendants as Wright.
Olivia A. Snyder, now deceased, was the owner of 15 lots in the unincorporated village of Zenith, Stafford County, Kansas, containing approximately three acres. The townsite of Zenith covered approximately 17 acres of land. On September 10, 1937, she sold these lots to Wright for $1,000, under an agreement in which he agreed to convey to Mrs. Brush, on Royalty Form 111, the undivided one-half interest in all the minerals underlying the real estate, subject, however, to an oil and gas lease he would give to E. C. King, his stepson, in which he would reserve the landowner's one-eighth royalty. After the execution and delivery to King of the oil and gas lease, Wright executed the royalty instrument, conveying to Mrs. Brush the undivided one-half of all oil, gas and other minerals underlying the tract, but not including any part of any bonus for oil and gas leases or rentals or delay money for postponement of development under oil and gas leases. The bonuses and delay rentals were expressly reserved to the grantor. The royalty conveyance further gave to the grantor the right to execute and deliver valid oil and gas leases upon the premises, conditioned only that any such lease must reserve an oil royalty payment of not less than one-eighth to the owners of the real estate.
During April, 1938, J. R. Robertson, president of the Robertson Petroleum Company, opened negotiations with Wright with regard to procuring a lease on this tract. After some negotiations, Robertson agreed to pay Wright $2,500 in cash and to give him an overriding royalty of 1/16th of the 7/8ths of all oil produced from wells drilled on the entire townsite of Zenith, under a community lease, to the amount of $10,000, in consideration of the execution of a community lease by Wright and his wife and Mrs. Brush and her husband.
In telephone conversations had by Wright with Mrs. Brush prior to the execution of the community lease, he represented to her that only two wells could be drilled on the townsite; that her interest in the royalty had but slight value; that no consideration was being paid for the community lease other than $1; that she was receiving exactly the same consideration for signing the lease as he was; and that no development could be had on her separate tract. Relying upon these representations, Mrs. Brush told him that if it was necessary to sign a community lease in order to secure development, she was willing to take her chance with the others, and accordingly executed the lease. The community lease was signed by the owners of all the real estate in the townsite of Zenith and reserved 1/8th of the oil and gas produced on the premises to them to be distributed to each according to the ratio that their respective acreages bore to the entire acreage. After the execution of the community oil and gas lease, the overriding royalty in the 7/8ths working interest was executed and delivered to Wright, providing for the payment to him of the sum of $10,000.
Upon learning the true facts, Olivia A. Snyder and Mrs. Brush instituted this action, seeking to recover as co-tenants one-half of the $2,500 paid in cash to Wright, and asking for a decree directing a transfer to them of a one-half interest in and to the overriding royalty conveyed by Robertson to Wright. At the conclusion of a trial to the court, extensive findings of fact and conclusions of law were made and judgment was entered for Mrs. Brush, providing that she recover from Wright $1,250 and interest, and that he assign to her an undivided one-half interest in and to the overriding royalty and account to her for one-half of all royalties paid or received from the overriding royalty. From this judgment an appeal has been taken to this court.
The theory upon which the trial court...
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