Ladd v. Foster Inv. Co.

40 F.2d 497, 1930 U.S. App. LEXIS 3214
CourtCourt of Appeals for the Tenth Circuit
DecidedMay 3, 1930
DocketNo. 179
StatusPublished
Cited by4 cases

This text of 40 F.2d 497 (Ladd v. Foster Inv. Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Tenth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ladd v. Foster Inv. Co., 40 F.2d 497, 1930 U.S. App. LEXIS 3214 (10th Cir. 1930).

Opinion

COTTERAL, Circuit Judge.

This action was brought by L. A. Ladd to recover damages from the Foster Investment Company for breach of a contract to accept and pay for an oil and gas lease, upon approximately 300 acres of land in Greenwood county, Kan. The issues were made up, and at the close of a trial to a jury, a verdict was directed and judgment entered for the defendant company. Ladd assigns error in that action and the exclusion of certain evidence.

In the petition, Ladd alleged he had title to the land by deed of Mabel M. Kofoid, as administratrix of Harvey Kofoid, and a contract of March 1, 1924, with her as administratrix and guardian of his two minor heirs, made with approval of the probate judge, requiring him to use diligence in making oil leases after consulting with her, and from the proceeds to discharge all liens against the land and the debts of the estate, the balance to revert to the heirs.

He then alleged the execution of a written contract with the defendant company on November 4, 1925, at Eureka, Kan., whereby he agreed to lease the land-for oil and gas mining purposes, under the terms of regular Producers’ Form of lease for five years, in consideration of $10,000, payable on delivery of the lease to the Exchange National Bank,. Tulsa, Okl., with abstract showing good and merchantable title in him, and that he performed the conditions of the contract on his part, delivering the abstract and two leases for separate portions of the land on November 13,1925.

It is next alleged that the company submitted the abstract and leases to its attorney, C. H. Rosenstein, receiving his opinion on November 18, 1925, in which he disapproved the title on the sole ground that by her sale, taken with the contract, the administratrix might be held an indirect purchaser in viola[498]*498tión of a Kansas statute, and suggested that if the title should be placed in satisfactory condition one lease instead of two should be ■executed; that the company sent a copy of the letter, with the abstract and leases, to Ladd by a letter of November 18, 1925, in■strueting him to get in touch with its attorneys, Leydig, Geddes & Grant, of El Dorado, Kan., and with them work out a plan to cure the defect, expressing a desire to complete the transaction; that plaintiff went with his attorney to see those attorneys, and E. W. 'Grant of that firm held the title was good, but suggested it be supplemented by probate ■court proceedings to dispose of the interest •of the minors, requiring about ten days, and advised plaintiff the title would be satisfactory if that court should authorize the guardian to execute the lease for the minors and 'the widow would execute it, and directed plaintiff to take those steps; and thereby the ■company ratified the contract and the one lease, and waived the necessary delay inci-' dent to such proceedings.

It is further alleged that Ladd proceeded 'to comply with the foregoing instructions ■and would have done so in a reasonable time, but for the company’s letter of November 24, 1925, which repudiated the contract and re-fused to accept the leases, whereby plaintiff’s damages became fixed at that date, rendering the guardianship proceedings unnecessary, ’but nevertheless, in excess of caution, a confirmation was obtained, on petition, notice, •and hearing, on December 19, 1925, and a lease was executed on January 12, 1926, and •tendered to the company two days later, ■signed by plaintiff and his wife, and Mabel M. Kofoid for herself and as guardian of ■the children. Finally, it is alleged the lease ■contracted for was on November 4, 1925, worth $10,000, but on November 24, 1925, •and ever since it has had no market value. Copies of the contract *and letters are exhibited with the petition.

The company filed á verified answer, admitting the correctness of the exhibits, except the lease made in January, 1926, and denies the tender of it. The answer also denies the ■company suggested that title to the land be ■supplemented by probate proceedings to dispose of any interest of the Kofoid heirs or if done the title would be satisfactory, denies ■authority of Leydig, Geddes & Grant to make .any agreement or waiver for the company, ■or that Grant agreed the title with certain probate proceedings would be satisfactory to the company, alleges that firm had authority only to advise the company as to steps they •believed necessary to make the title merchantable, and alleges after the firm made its report, on November 23, 1925, the company advised plaintiff they would proceed no. further toward the purchase of the lease and rescinded the original agreement. The answer, specifically denies the tender of the lease or an abstract showing good and merchantable title’to the land.

Various questions have been argued, but at the outset appellee contends there was no enforceable contract between the parties because certain terms of the lease were not specified, and hence the company could not be liable for nonperformance. There was absent any stipulation as to the amount of royalty, the time drilling was to commence, the rent due for delay, or other terms of a complete lease. The contract was to make another, a lease contract. In order to be binding, it was essential that all the terms and conditions of the latter be specified, and as this was not done, the contract was not enforceable. Grow v. Davis, 110 Kan. 214, 203 P. 683; Peer v. Hughes, 25 Ariz. 105, 213 P. 691.

But we pass to other questions presented. It appears from the evidence that on November 14, 1925, two leases and an abstract of title were tendered by appellant to. the appellee at bank, with draft attached for $10,-000. The petition does not correctly or fully state the contents of Mr. Rbsenstein’s letter. He reported as objections to the title: (1) Five’ mortgage liens aggregating $12,864.27, and interest; (2) an outstanding gas and oil lease for a five-year term, provided there was production or the lessee was in possession attempting to complete a well within the term; (3) a deed of the administratrix probably void because tjie contract was a device for a' sale to her; and (4) the tender of two leases instead 'of one.

Counsel for Ladd admits the title as offered was not merchantable, and was properly subject to rejection, but contends that as no time was specified for furnishing the lease, time was waived and the contract was kept alive by the request of the company to cure the defects, so that the transaction turned on Ladd’s “prospective ability to perform” within a reasonable time. Performance was sought to be rendered by the probate proceedings, culminating in a single lease of Ladd and wife, and Mrs. Kofoid as an individual and as guardian of the minor heirs, executed and tendered in January, 1926.

A difficulty with this position is it assumes, as the petition alleges, the attorneys [499]*499at El Dorado were authorized to act for and bind the appellee, and necessarily on the strength of appellee’s letter of November 18, 1925, to appellant, for want of other proof, but it contained no such authority. It was as follows:

“We enclose carbon copy of opinion of our attorney, C. H. Rosenstein, affecting the title to the three hundred acres of land in Sections 25 and 26 of Township 26 South, Range 9 East, Greenwood County, Kansas, covering which we purchased an oil and gas mining lease from you several days ago.
“You will notice from this opinion that Mr. Rosenstein rejects the title absolutely. We are, therefore, returning the abstract and leases to the bank today, with instructions that they be forwarded to you.

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Bluebook (online)
40 F.2d 497, 1930 U.S. App. LEXIS 3214, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ladd-v-foster-inv-co-ca10-1930.